Major UK stocks were hampered by weakness in the banking and mining sectors during Tuesday.
Inflation expectations and central bank responses have remained key market elements. US Treasuries posted gains during Tuesday with the US 10-year yield at 6-week lows.
Wall Street stocks were unable to make further headway with caution ahead of the US CPI data. Risk conditions were more cautious in Asia, although equities pared losses in late trading.
The dollar performance was mixed with a net advance against commodity currencies. EUR/USD was unable to hold above 1.1600 and drifted lower. Sterling retreated from intraday highs as risk conditions turned more cautious. The yen and Swiss franc made net gains on the day.
Commodity currencies overall lost ground with more fragile risk conditions. The Canadian dollar was resilient with net gains amid gains in oil prices. Oil prices were boosted by expectations of firm demand with an API draw also boosting confidence.
Precious metals were supported by lower yields, although gains were limited. Bitcoin and Ether retreated from record highs.
Euro-zone equities were held in tight ranges during Tuesday with limited net losses amid pressure for a correction after a strong run of gains to fresh record highs.
Major UK stocks were hampered by weakness in the banking and mining sectors during Tuesday. A decline on Wall Street was also a significant element in curbing sentiment with the FTSE 100 index declining 0.35%.
Wall Street equities were unable to make headway on Tuesday with caution ahead of Wednesday’s inflation data and pressure for a correction after a strong run of gains. The S&P 500 index declined 0.35% with futures losing ground on Wednesday.
Sentiment was weaker in Asian markets with Japan’s Nikkei 225 index declining 0.6% while the Australian ASX index declined 0.1%, although there was buying towards the Asian close.
China’s Shanghai index declined 0.4% with Hong Kong’s Hang Seng index reversing sharply to post a 0.6% gain in late trading.
Stock to watch today
Pearson has corrected lower in recent months toward an important 61.8% Fibonacci support level at 584.6p. Buyers appear to have returned inline with the major support, with the shares closing above the 10 day exponential moving average. This could trigger fresh upside momentum in the short term. We are looking for opportunities to buy.
CCM Opinion: BUY
Buy between 600 – 613p
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