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Reports UK

UK stock market commentary (April 22, 2014): Back to business

April 22, 2014, Tuesday, 06:02 GMT | 01:02 EST | 09:32 IST | 12:02 SGT
Contributed by Capital Spreads

European equities are set to grind higher tracking a positive session overnight in the US. Although gains are expected, expect markets to be a bit groggy following the long weekend and whilst traders catch up on geo political events. The Ukraine crisis is a nightmare to decipher what’s going on and its subsequent affect on risk. The last big headline was the surprise agreement between the West and Russia at the Geneva talks to de-escalate the situation, but any perceived optimism has been scuttled by the clear detachment from events on the ground.

In a very quiet day of trading for the Wall Street industrials, the 30 stock index managed to add weight nonetheless. It was the fifth straight day of gains for the Dow marking the longest winning streak for six months - the index ended up 40 points at 16449. Investors will keep one eye on the situation in Ukraine whose situation still remains in the balance, but most of the attention will be given to a heavy week of corporate earnings.

In an understandably low volatility session for the Euro the only macro economic news to influence the pair lower was the better than expected Leading Indicators index, which showed the US economy is in ruder health than previously thought. Albeit a small move, the Euro dropped 20 points to 1.3792 against the Dollar.

Focus will continue to look towards the on going tensions in the Ukraine. Fear that the conflict would in turn disrupt Russian oil and other energy exports provided the support for US Crude oil on Monday. The June contract settled up 35 cents a barrel at $103.37. Oil was also helped by the Leading indicators reading which buoyed optimism for future demand.

Gold is now at a three week low as its appeal as a safe haven investment reduces mildly in the face of stronger demand for equities and no fresh stories from Eastern Europe. Blame is also being pointed at recent EFT outflows. The precious metal closed down $5 at $1291.