European indices continue to trade higher on commodities – City Index Spread Betting

Spread betting provider City Index look at the gains in price of copper and crude oil.
By: City Index
June 28, 2011 - PRLog -- Gains in the price of copper and crude oil helped to provide a second day of gains for European indices, with investors buying into the heavyweight mining and energy stocks.

We have seen mining and energy stocks tracking a 0.7% gain in the prices of copper and crude oil. As such, both sectors have seen higher near-term demand and this is lifting the two heavyweight sectors higher than 1% at one point in early trade on Tuesday. The UK banking sector is not far behind though, with gains of 0.5% this morning adding to yesterday’s 0.5% gains, led chiefly by results from Asia-focused bank Standard Chartered.

Utility firms have seen higher demand today on the back of positive broker ratings. Evolution Securities raised their guidance on Northumbrian Water, Severn Trent and United Utilities, giving a lift to all three share prices this morning.

Not getting too far ahead of ourselves

Despite the two days of gains for European equities, traders are not getting too far ahead of themselves with the vote on the Greek austerity package nearing. With the French banks seemingly agreeing to rollover 50% of their Greek bonds holdings for 30 years and 20% into zero-coupon AAA bonds with deferred interest, optimism is growing that with the wolves at Greece’s gates, Europe is uniting at the right time to help the country avoid a default that could send shockwaves throughout the rest of the eurozone.

Cable & Wireless slumps 16% on profit warning

Shares in telecoms firm Cable and Wireless slumped 16% on Tuesday after issuing a profits warning as sales slowed and their CEO, Mr Jim Marsh, resigned. The firm has said that full-year profits will miss estimates due to slower than expected sales orders, and has halved its dividends to 2.25p per share. Shares have lost nearly 40% in value this year alone and traders continue to be concerned for the future prospects of the company in the midst of strong competition and lack of boardroom solidarity.

UK GDP rises 0.5% for Q1

The final reading of UK Q1 GDP was unrevised, meaning the UK grew at 0.5% for the first quarter of the year. The reading gave little surprise to investors, who were expecting no change in the final reading, and is unlikely to change Bank of England Governor Mervyn King’s stance that raising interest rates in the near term is unlikely to be well timed in the midst of slow UK growth. We saw the pound weaken somewhat against the US dollar in the immediate reaction to today’s final GDP reading.

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As a group, City Index transacts in excess of 1.5 million trades every month in over 50 countries worldwide. We provide a wide range of instruments including forex, CFD trading and spread betting. For more information, visit
Source:City Index
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