Proactiveinvestors recommends
Pdf

MARKET PREVIEW: FTSE 100 to extend gains after US and Asian stocks surge

October 28 2011, 7:00am MARKET PREVIEW: FTSE 100 to extend gains after US and Asian stocks surge

UK stocks are expected to extend gains today after rallying on Thursday on the back of the long awaited EU anti-crisis deal, which was unveiled early in the morning yesterday. The FTSE 100 is expected to open at 5,730, up 17 points (0.3 percent) from Thursday’s close.

EU policymakers have agreed to increase the size of Europe’s bailout fund to €1 trillion and reduce Greece’s debt burden by writing down half of its debt owned by private bondholders. In addition, the EU presented a bank recapitalisation plan, which calls for European banks to raise additional capital of €106 billion.

The announcement triggered a rally in the FTSE 100 index, which put it at three month highs, also giving a boost to US and Asian equities.

“There does remain some doubt however as to how these measures will be implemented and achieved, none more so than the increase in size of the European Financial Stability Facility,” said chief market strategist at City Index Joshua Raymond.

“These details are set to be confirmed later next month and for now, it seems investors have been happy to put those concerns to the backburner.”

Today’s macroeconomic calendar is thin with no US data set to be released apart from the final reading of the University of Michigan consumer confidence index for October.

Earlier today, it was revealed that Britain’s Gfk consumer confidence index fell from minus-30 in September to minus-32 this month.

Across the Atlantic, the Dow Jones Industrial Average (DJIA) rallied 339 points (2.85 percent) to end the session at 12,208 and the broader S&P 500 index climbed 42 (3.45 percent) to close at 1,284.

Asian stocks moved in the same direction as US equities. Japan’s benchmark Nikkei 225 index stood 95 points (1.05 percent) higher at 9,024 at the end of the session and China’s Shanghai Composite Index added 27 points (1.1 percent) to reach 2,463 just before close of play.

No investment advice

The Company is a publisher. You understand and agree that no content published on the Site constitutes a recommendation that any particular security, portfolio of securities, transaction, or investment strategy is suitable or advisable for any specific person. You further understand that none of the information providers or their affiliates will advise you personally concerning the nature, potential, advisability, value or suitability of any particular security, portfolio of securities, transaction, investment strategy, or other matter.

You understand that the Site may contain opinions from time to time with regard to securities mentioned in other products, including company related products, and that those opinions may be different from those obtained by using another product related to the Company. You understand and agree that contributors may write about securities in which they or their firms have a position, and that they may trade such securities for their own account. In cases where the position is held at the time of publication and such position is known to the Company, appropriate disclosure is made. However, you understand and agree that at the time of any transaction that you make, one or more contributors may have a position in the securities written about. You understand that price and other data is supplied by sources believed to be reliable, that the calculations herein are made using such data, and that neither such data nor such calculations are guaranteed by these sources, the Company, the information providers or any other person or entity, and may not be complete or accurate.

From time to time, reference may be made in our marketing materials to prior articles and opinions we have published. These references may be selective, may reference only a portion of an article or recommendation, and are likely not to be current. As markets change continuously, previously published information and data may not be current and should not be relied upon.