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[London] FTSE 100 gains are far from convincing

[London] FTSE 100 gains are far from convincing

Equity markets were certainly rattled yesterday with that sell-off in the banking sector very much setting the pace, but investors do appear set to find some solace in Tuesday’s session.

By Tony Cross, Monk Communications, 27th September 2016

There has been some upbeat industrial profits data out of China, which should help stem the slide for natural resources stocks, whilst we also have feedback from the first US Presidential debate to chew over. Whilst no side delivered a knockout blow, Hilary Clinton seems to have come out on top and this is certainly the market’s preferred outcome. Indicators like USD/MXN offer the most blatant illustration here of which way financiers feel this contest will go, with the pair dropping from 19.90 to 19.50 during the showdown, but for those of us on this side of the Atlantic, this has many parallels with the Brexit referendum – the contest is certainly far from over.

Wolseley has updated the market with something of a mixed bag of numbers – currency tailwinds are helping, but the backdrop remains weak, especially beyond the US. News of job losses in the UK may go some way to shoring up sentiment, but the uncertain economic outlook is winning out with the stock off almost 5% already. Intercontinental Hotels is also struggling in the wake of negative broker chatter, whilst housebuilders are continuing their slide too in the wake of yesterday’s poor lending data.

The FTSE-100 may be nudging a shade higher, but the gains are far from convincing and the spectre of month-end profit taking cannot be ignored, either.

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