Major UK stocks were undermined by increased speculation that the Bank of England would be forced into a near-term tightening
Consolidation was the overall market theme during Wednesday with relatively narrow ranges prevailing.
Markets continued to monitor global inflation developments and central bank policies. US bond yields were little changed as markets waited for an announcement on the Fed Chair.
Wall Street equities drifted lower with reservations over valuations and lower energy prices. Asian markets posted limited net losses with concerns over growth trends.
The dollar held firm, but drifted lower from 16-month highs. EUR/USD found some support below 1.1300 with an element of short covering, but coronavirus reservations persisted.
Sterling posted net gains as inflation data reinforced expectations of a December rate hike with EUR/GBP close to 20-month lows.
The Canadian dollar was undermined by the retreat in oil prices, while the Australian dollar recovered from intra-day lows.
Oil prices retreated to 5-week lows with expectations of a less favourable supply/demand balance. Precious metals maintained an underlying strong tone with inflation trends in focus. Bitcoin found some support below the $60,000 level.
Euro-zone equities were held in tight ranges on Wednesday with expectations of a dovish ECB policy offset by coronavirus reservations and concerns over supply issues while Wall Street failed to provide support.
Major UK stocks were undermined by increased speculation that the Bank of England would be forced into a near-term tightening. Commodity prices were also fragile while underlying cost pressures persisted.
Wall Street stocks edged lower on Thursday with underlying reservations over growth conditions and the impact of sustained upward pressure on costs with valuation concerns also in evidence with the S&P 500 index declining 0.25%.
Futures edged higher on Thursday, although Asian equities tended to drift lower with significant selling in the Chinese tech sector.
Japan’s Nikkei 225 index declined 0.3% as the dollar retreated, while the Australian ASX index posted a 0.1% gain.
China’s Shanghai index declined 0.45% with Hong Kong’s Hang Seng index 1.5% lower in late trading.
Stock to watch today
Indivior is trading in a superb uptrend that is showing no signs of slowing. The recent pullback from the highs appears to be an opportunity to buy the dip. A bullish engulfing candle was formed yesterday on the daily chart, which is an indication that higher prices are likely in the short term. A move to new highs is expected from current levels.
CCM Opinion: BUY
Buy between 235 -243p
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