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Reports UK

UK stock market commentary (May 13, 2014): Onwards and upwards; but for how long?

May 13, 2014, Tuesday, 05:32 GMT | 01:32 EST | 10:02 IST | 12:32 SGT
Contributed by Capital Spreads

European equities are set to gain on the open buoyed by the record highs in the US and strong sessions in Asia. Quite what is fuelling the market’s ability to shrug off weak China data and an escalating situation in Ukraine has many perplexed but the bulls don’t appear to be asking any questions. However, although US markets have no trouble taking out new highs, as the European indices approach their yearly highs once more, they’d better come up with a concrete reason if they want to make a meaningful move out of their well worn trading range.

More all time highs for the Dow - no wonder spread betting clients are selling the Dow heavily at the moment. There isn’t much explanation for the rise yesterday, no data to speak of anyway. The short trade based on the Ukraine has not materialised, perhaps the bears just decided to admit defeat and pull the plug? A correction today would seem the obvious move; suddenly things have got more interesting for stocks….. The Dow Jones closed at 16,695, up 112 points.

The Euro had a quiet day yesterday against the dollar amongst the quandary that was the move in the stock market. The currency pair spent the majority of the day within a 20 pip range around the 1.3760 mark, however this was no real surprise given how light the day was on the data front. Today currency traders can look forward to some data, the German ZEW surveys in the morning and US retail sales in the afternoon.

The reasoning behind the rise in the price of US crude oil yesterday was put down to speculation that supplies declined for a second week in America. The oil market will also keep a close eye on China’s industrial production today - an increase will see increased demand from the world’s second largest consumer. The contract for June delivery settled at 100.59, up about 60 cents.

Gold is still hovering around the $1,300 mark. It is being pulled south by weakening physical demand, particularly from China, and north as the tensions in Ukraine continue to persist. Spot gold closed up $7 at $1,296.

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