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Reports UK

UK stock market commentary (July 25, 2014): Soft start but no real danger

July 25, 2014, Friday, 05:10 GMT | 00:10 EST | 08:40 IST | 11:10 SGT
Contributed by Capital Spreads

European equities are set to ease on the open dragged lower by US earnings. Despite a good day for European equities yesterday, the US markets bobbed around unchanged on the day. However, after hours results from Amazon saw US index futures sell off and this will be weighing on the open.

Earlier in the US corporate earnings continued to surprise the markets coming in higher than estimated and pushing equities up. At the same time, the overall economic data presented a mixed picture where housing is a weak point as indicated yesterday by the disappointing new home sales figures. So after an early rise the Dow Jones finished flat for the day.

Manufacturing and services in the euro area unexpectedly rose, giving the European Central Bank a boost of confidence that easing the monetary policy could to do the job. That put a stop to the steep nosedive for the shared currency we have seen in the last few weeks with the EUR/USD pair ending flat around 1.3462.

It appears that despite a draw in the weekly oil inventories, the global supply output still looks healthy enough to maintain southward pressure on prices. As such, the WTI crude gave back the midweek gains, retracing yesterday $1.19 to $102.02 a barrel in the face of yet another expansion for Chinese manufacturing.

Signs the global economy keeps improving sent gold plunging as demand for a haven was reduced. The precious metal moved below the psychologically important $1300.00 mark and finished the day $10.00 lower at $1293.9 amid predictions from Goldman Sachs of a decline below $1100.00 by the end of 2014.