Major UK stocks were underpinned by hopes for positive coronavirus developments, but a firm Pound acted as a headwind
Risk appetite dipped on Monday amid on-going concerns over expected Fed tightening and higher interest rates.
Wall Street equities dipped sharply as confidence continued to ebb with further selling in the tech sector.
US bond yields move higher on the day with the 10-year yield briefly trading at 22-month highs.
US equities rallied strongly from lows which helped calm markets and US yields retreated from highs. Sentiment was still fragile with Asian equities tending to drift lower.
The dollar failed to hold intraday gains and posted net losses despite Fed expectations. EUR/USD found support below 1.1300 and advanced to near 1.1350 on speculation over an ECB policy shift. Sterling was resilient amid higher yields, but GBP/USD again hit resistance close to 1.3600.
Commodity currencies retreated as equities came under pressure, but rallied from late in Monday. Oil prices were resilient with a firm recovery from dips amid expectations of tight supply trends. A dollar setback and retreat in bond yields provided relief for precious metals.
Bitcoin rallied strongly from 3-month lows.
After a solid opening, Euro-zone equities were undermined by a wider slide in risk appetite and sharp losses on Wall Street. Bourses posted net losses despite an element of optimism over medium-term coronavirus developments.
The German DAX index declined 1.1% with a 1.5% retreat for the Eurostoxx 50 index.
Major UK stocks were underpinned by hopes for positive coronavirus developments, but a firm Pound acted as a headwind and a sharp decline on Wall Street dragged the market lower with the FTSE 100 index declining 0.5%.
US equities retreated sharply in early US trading on Monday with further reservations over Fed tightening and higher bond yields. There was, however, strong buying on dips with S&P 500 index losses held to 0.1%.
US futures were little changed on Tuesday while the sentiment remained cautious in Asia.
Japan’s Nikkei 225 index declined 0.9% after being closed on Monday with a 0.8% retreat for the Australian ASX index.
China’s Shanghai index closed 0.7% lower amid coronavirus restrictions with Hong Kong’s Hang Seng index 0.4% lower in late trading.
Stock to watch today
GlaxoSmithKline continues to trade in a long term bullish channel. Yesterday we saw a close above the 10 day exponential moving average, which was accompanied by a substantial increase in volume. The shares have consolidated above support at 1580p, which should provide a platform for further gain over the short to medium term. Further upside is expected from here.
CCM Opinion: BUY
Buy between 1600 – 1610p
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