Yesterday’s surge higher left London’s FTSE-100 ripe for a degree of profit taking and especially given the pace set on Wall Street last night the early losses should arguably be even more pronounced.
By Tony Cross, Monk Communications. Wednesday 5th October 2016.
However with sterling continuing to tumble – GBP/USD has already toyed with sub 1.2700 territory – there’s still value in holding onto blue chip stocks and their valuable foreign currency earning capabilities.
Tesco is top of the pile in the wake of its very well-received earnings update and hopes that the retail giant may have turned a corner have added as much as 8% to the stock in early trade. Peers Sainsbury and WM Morrison are being pulled along in the wake here with gains of around 2%, whilst it’s the precious metals miners who are stuck at the foot of the index, after gold prices plummeted on mounting US rate hike expectations.
Looking ahead, we’ve got services PMI data from the UK later this morning which could prove instrumental if we’re hoping to consolidate above the 7,000 level, whilst the US ISM non-manufacturing print will also be under scrutiny and a solid figure here – we’re expecting 53 – would add more weight to the idea that the Fed hawks will win out.
