Market Movements Would Be Sensitive To Trade Talks

  • Jan 08, 2019 GMT
  • Team Kalkine
Market Movements Would Be Sensitive To Trade Talks

While the global markets were eagerly waiting for some positive news, it can be assumed that the recent US jobs report as well as the comments of the US Federal Reserve Chairman had largely supported the investors’ sentiments last week and early this week. These news pieces have, to some extent, shaved off worries about the global economic slowdown. However, that was not all. The comments from the US Federal Reserve Chairman further improved the sentiments of the investors and added some cautious optimism as Mr. Powell hinted that the central bank would be patient in raising the interest rates moving forward. Earlier, the global markets were witnessing the impacts of the worries about the slowdown and these worries further increased after Apple Inc. reduced their expectations for the revenues of December 2018 quarter. Moreover, the slowdown in the Chinese economy also weighed over the sentiments of the global investors.

Looking at UK equity market, FTSE 100 closed at 6,861.60, up 0.74% as at January 08, 2019 against the figure of 6,810.88 implying an intra-day fall on January 07, 2019. STOXX 600 that closed at 342.88 which reflected an intra-day fall on January 07, 2019, was up on January 08, 2019 to 346.50. UK stocks opened higher, and FTSE 100, which constitutes about 70 percent of the international income saw gains. Initial trading scenario reflected multinational heavyweights AstraZeneca (AZN.L), Unilever (ULVR.L), etc. falling a bit. However, the metal industry players neutralised the scenario as China cut its reserve requirement ratios.

Moreover, the market players also need to know that even though worries about the global downturn are fading away, the situation is still not favourable completely. On the other hand, there are expectations that the trade talks between the US and China might materialize positively. If this happens, it would largely support the global equity markets and the investors’ sentiments might experience a further revival.

At the time of writing on January 8, 2019, FTSE 100 and STOXX 600 were up and the well performing stock market saw movement attributed to investors’ sentiments shifting towards retailers. While food retailers demonstrated momentum, clothes retailers also charged higher.

Overall, the FTSE integrated the gains and UK shares edged up on Tuesday. The sudden rally of stocks is a testimony to the markets reacting positively if the US-China trade talk takes the right direction. Also, the surge in the supermarket sales added to the uplifting of the market.

On the London stock market exchange, the risers included Ashtead Group PLC, up about 5% and Rolls-Royce Holdings Plc that also rose up about 5%. Other players like the supermarket group, Tesco PLC demonstrated a rise of around 3%. Mainly, Christmas trading updates and consumer spending supported few stocks. Then, players like Reckitt Benckiser Group Plc saw a stock price rise of above 1%. On the other hand, telecom player, Vodafone Group Plc was down by more than 1%. FTSE 250 otherwise depicted many winners and this bucking of trend was quite noticeable and may set the stage for the upcoming days.

With Bank of England reducing the interest rates to a historic low level, the spotlight is back on diverse investment opportunities. 

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