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Reports UK

UK stock market commentary (April 23, 2014): Mixed cues, mixed moves

April 23, 2014, Wednesday, 05:55 GMT | 00:55 EST | 09:25 IST | 11:55 SGT
Contributed by Capital Spreads

European equities are set to open mixed as traders remain cautious. Although the US’s earning season appears to be doing a good job of keeping the bulls fuelled, looking east another sign of weakness from China’s manufacturing industry is cause for concern. The gains over the last few days have seen a welcome turn around and recovery after the initial weak start to the month, but now as we edge near to the top of recent range, traders are looking hesitant in case sellers emerge again.

Strong earnings and corporate deals managed to help the US equity markets to their sixth day of gains on the trot. Announcements, particularly from the Pharmaceutical sector was responsible in corporate data, while Existing home sales decreased less than expected to give the bulls more macro economic news to celebrate. The Dow Jones ended up 65 points at 16515.

Volatility was once again low on Tuesday as traders await comments from Mario Draghi later in the week on thursday. The pair played around with the 1.38 level throughout the day but ended up 20 pips to end the day at 1.3809.

US crude oil suffered a significant sell off yesterday losing more than two percent in the session. Closing at around $102 investors decided that expectation of increased supply to be more important than the continuing concerns in Ukraine and the impact of the sanctions that may be imposed on Russia. It is predicted that oil supply could exceed an all time high this week.

A classic ‘risk on’ day hurt the price of gold again on Tuesday. The precious metal hit a two month low at one point during trading but then rallied slightly to regain some losses. Regardless, it closed down $6 at $1,284. Strong data and strong corporate news strengthened the case for riskier assets, and an efflux from Gold was the result.