New York: 01:49 || London: 06:49 || Mumbai: 10:19 || Singapore: 12:49

Reports UK

UK stock market commentary (June 12, 2014): Don't panic Mr Mainwaring!!

June 12, 2014, Thursday, 06:50 GMT | 01:50 EST | 10:20 IST | 12:50 SGT
Contributed by Capital Spreads

Mixed starts for the indices today as traders take stock of yesterday’s declines. Many traders used the World Banks cut to its global growth forecast as an excuse for a bit of profit taking which resulted in a fairly orderly exit out of equities. Volume did pick up a bit on the way down and there was no apparent interest from bargain hunters so all the chatter has now turned to how much further we have to go?

The main culprit ‘responsible ‘ for yesterday’s steady sell off in US equities was a report released by the World Bank which cut its forecast for global growth, at odds with latest economic data. In addition, some surprise results in the US elections fuelled concerns of further gridlock in Washington. So, the Dow Jones lost 87 points to end at 16,864.

The euro continued to slump against the greenback, losing another 15 pips to 1.3531, last seen in early February. ECB President Draghi hinted of more radical measures last week after cutting interest rates in an attempt to spur growth and address the falling inflation.

The US Department of Energy released its weekly stockpiles report, showing a bigger that expected draw in crude oil inventories, double the initial estimates (2.6m barrels vs 1.3m barrels). That pushed the WTI crude prices 18 cents up to $104.49 a barrel whilst the OPEC agreed to maintain its production target at 30 million barrels a day.

Gold prices held near flat at $1260.5 failing to attract any meaningful interest after fresh concerns disseminated by the World Bank’s comments. While the precious metal posted a slight rebound during last week, the overall outlook remains bleak and technically only a cross above the $1280.00 could bring better prospects.