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Morning Markets Report – Thursday 7th October 2021

Wall Street stocks reversed losses to trade higher and Asian markets posted gains.

 

Sharp moves in gas prices had an important impact across asset classes on Wednesday as overall volatility increased.

Risk appetite dipped sharply in European trading amid inflation fears.

US ADP jobs data was stronger than expected which helped soothe markets to some extent.

Risk conditions recovered strongly amid a retreat in European gas prices on Russian rhetoric with hopes for a US debt-limit deal also underpinning confidence.

Wall Street stocks reversed losses to trade higher and Asian markets posted gains.

Oil prices dipped from 3-year highs on an inventory build and a slide in gas prices helped trigger a correction. Precious metals recovered some ground with limited net gains as US yields edged lower.   Bitcoin posted strong gains to the highest level for close to 6 months.

Euro-zone equities declined very sharply in early trading with a slide in German factory orders amplifying losses triggered by the deterioration in global risk appetite.  

Bourses did attempt to rally from lows with the German DAX index declining 1.45% while the Eurostoxx 50 index posted a 1.3% decline.

Major UK stocks also declined sharply in early trading with a slide through the 7,000 level in the FTSE 100 index amplifying selling pressure. There was a recovery late in the session with a 1.1% decline on the day as expectations of merger flows provided underlying support.

Wall Street equities posted sharp losses in early trading as inflation fears continued to sap confidence. Hopes for a debt deal helped stabilise sentiment and there was a sharp reversal with the S&P 500 index closing 0.4% higher.

Futures held firm on Thursday and Asian bourses responded with gains as sentiment strengthened. Japan’s Nikkei 225 index advanced 0.6% with a 0.7% gain for the Australian ASX index.

Chinese markets remained closed while the Hong Kong Hang Seng index jumped 2.6% in late trading.

 

 

Stock to watch today

 

There has been no real place to hide amid the recent volatility in European stocks. We are in the midst of a corrective phase in the markets and stocks are being sold off sharply. We are waiting on some support to emerge before looking for value, but in the meantime banking stocks continue to perform well. With the threat of interest rates rising, it’s banking stocks that are leading the way. Lloyds Banking Group is worth a look at the moment as the shares have broken out from a consolidation pattern and have retracted sufficiently to offer an attractive entry point. We believe the uptrend could persist here over the short to medium term.

 

 

CCM Opinion: BUY

Buy between 45 – 47p

Stop: 41p

Target: 53p

 

Want more stock picks from Clear Capital Markets?

 

Click here to get our latest report “5 Stocks to Buy in October”

 

The value of shares can fall as well as rise; you may not get back the amount you invested. Past performance is no guarantee of future performance. Capital is invested at risk This document is published by Clear Capital Markets and does not constitute a solicitation or personal recommendation for the purchase or sale of investment. The investments referred to may not be suitable for all investors. Any data or views given should not be construed as investment advice. Every effort is made to ensure the accuracy of the information, but no assurance or warranties are given. Clear Capital Markets Limited is authorised and regulated by the Financial Conduct Authority FRN 706689.

 

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