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Reports UK

UK stock market commentary (July 14, 2014): Bulls down but not out

July 14, 2014, Monday, 05:16 GMT | 00:16 EST | 09:46 IST | 12:16 SGT
Contributed by Capital Spreads

European equities are set to edge higher on the open as bargain hunters finally make an appearance. After a pretty gruesome week which saw the major European indices touch levels not seen for a couple of months, traders have taken the weekend to calm down and decided that the recent woes of bad economic data and the flaring up of the euro zone crisis isn’t a sign of the long awaited ‘correction’. Whether or not they are correct is some thing that will have to be seen and despite this morning’s positive open, it’s going to take some serious effort on the part of the bulls to take back the lost ground.

Financial stress in Portugal kept the US stocks under pressure during Friday’s morning session on concerns of spill over into wider euro area. However the trend reversed course led by rallies for EBay and Amazon on good economic growth prospects. The Dow Jones finished the day 43 points higher at 16,953 and still going strong this early morning.

Amid warnings from German Chancellor Angela Merkel regarding the euro zone’s economic fragility, the shared currency ended flat versus the greenback at 1.3608. It appears investors stopped to reassess the next possible direction as the minutes from the last FOMC meeting offered few clues on the timing of interest rates hikes.

Easing concerns over crude oil supplies in Iraq and Libya triggered a sharp selloff in WTI prices on Friday which closed $2.12 down at $100.74 a barrel. The move was accentuated by news that crude stockpiles at Cushing, Oklahoma the delivery point for US crude, climbed last week with gasoline inventories also rising.

Gold prices moved higher on safe haven demand as financial troubles re-emerged in Europe closing $2.3 up at $1338. However, overnight we saw a pullback in the precious metal as the banking woes in Portugal did not escalate.

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