New York: 12:15 || London: 17:15 || Mumbai: 20:45 || Singapore: 23:15

Reports UK

UK stock market commentary (June 02, 2014): Bulls playing follow the leader

June 2, 2014, Monday, 05:29 GMT | 00:29 EST | 08:59 IST | 11:29 SGT
Contributed by Capital Spreads

European equities are set to start the month with a pop as the low volume, no news rally continues. With few catalysts to explain the move other than traders chasing momentum, record closes in the US on Friday are certain to give the European markets a nudge higher today. However, as is always the case with the first week of the month, the uncertainty thrown up by the central bank meetings and Non Farm Payrolls may keep a lid on the irrational exuberance.

Despite a surprise drop for the US consumer spending, the Dow Jones pushed higher on Friday closing 24 points up at 16,711. At the same time consumer confidence plunged more than estimated in May but that did not stop investors to move the Dow to a fresh all time record high of 16,750 in overnight trading . And at the time of writing it appears the bulls are still in control.

Ahead of the weekend, the euro posted a slight rebound of 28 pips against the dollar to 1.3631 as participants preferred to square some of those short positions. The shared currency was on the back foot since almost reaching 1.40 at the beginning of May as the European Central Bank is expected to ease its monetary policy further at its meeting later this week.

Amid plentiful oil supplies in the US, the WTI crude prices resumed their slump following disappointing economic data. It was a decline of 62 cents to $102.87 helped in part by reports in the media that this time around Russia pulled back its troops from the border with Ukraine which took the risk premium off the table.

True to its southward trajectory, gold prices posted another loss of $5.1 to $1250.6 as a renewed rally in equities captured most of the attention. What appears to be easing tensions in Ukraine also reduced demand for the precious metal as a safe haven and we’re looking at the early February this year for the next support around $1240.00 mark.