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Reports UK

UK stock market commentary (June 11, 2014): Nothing to see here move along

June 11, 2014, Wednesday, 06:46 GMT | 01:46 EST | 10:16 IST | 12:46 SGT
Contributed by Capital Spreads

European equities are set to open flat as markets consolidate. Technically the FTSE and CAC are opening lower but that’s due to due to some constituents going ex-div today. The bulls and bears have struck up an easy truce at the moment, squaring off whilst waiting for a catalyst to jolt the markets either way. Interestingly, both sides are using the recent gains for their justification for holding their view, with the bulls citing the momentum effect for staying long whilst the bears keep saying a top is in and correction is round the corner.

Towards the close the Dow Jones reversed trend, paring earlier losses to finish at an all time record high of 16,959 with a gain of 23 points for the day. Despite some concerns about equity valuations it appears investors were pleased by the recovery in the US jobs market and for now, refuse to see the upside potential as limited.

True to its recent bearish form, the shared currency resumed its southward trajectory losing another 46 pips versus the greenback to end at 1.3546. An ECB official reiterated ‘the determination for keeping high monetary accommodation’ with many expecting further weakness in the euro.

The WTI crude prices lost just 17 cents yesterday to $104.29 on light profit taking after the previous day’s sharp climb. Speculation that oil inventories in the US fell for a second week acted as rather good support, discarding renewed strength in the dollar. Meanwhile, OPEC is due to meet later today and expectations point to keeping the quota unchanged at 30million barrels a day.

Enticed by the steep plunge seen in the gold prices lately, physical buyers finally went out bargain hunting. Especially in China, the world’s largest consumer, there were reports of sudden rise in demand which in turn pushed the precious metal $7.3 higher to $1259.9.