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Capital Spreads: FTSE 100 fails again at 4500 PDF Print E-mail
Written by Sam Coventry   
Wednesday, 04 August 2010 09:59

FTSE 100 spread trading thoughts from Simon Denham at Capital Spreads.


The FTSE 100 is 1.43% lower at 5,319.49 at 10:40 AM in London. The JSE has followed the trend set by the FTSE 100 and is also lower. However the sell off in Johannesburg is less severe with the index 0.38% lower.

In his morning column, Simon Denham at spread trading firm Capital Spreads says, "markets appear to be consolidating around current levels with the FTSE 100 failing yet again to make headway above 5400."

The good news though - and this is a crucial bit of insight for those spread trading the FTSE 100 - is that on the other hand the index is showing no appetite to drift below 5340/50 either.

"This is making for rather tiresome trading as we spend hours in very small ranges. No doubt bulls will be hoping that this is just a pause before the market gathers its collective breathe for a push higher just as the shorts will be gathering evidence that this might be an indication that investors are losing their enthusiasm at these levels," says Denham.

"The current price is 5350 at the bottom of yesterday’s session range and our clients are busily buying back shorts set up at the highs."

Chris Purdy at spread trading firm SpreadEx has suggested, "this period may soon become ‘the rally that never was’ as major indices continue tapering gains.  Even though the majority of corporate earnings have been in positive territory, few have been exceptional.  We haven’t seen the sector-wide benefits of positive news that can really make a rally go boom." 

There have been a number of half year results for investors to take note of:

Lloyds Banking Group (LON:LLOY) interim Results saw PBT come in at £1.6bn, ahead of expectations with loan impairments falling to £6.55bn with the bank expecting to see a 'smaller, more productive Balance Sheet' going forward. Shares in Lloyds Banking Group are higher by 1.6%.

Standard Chartered (LON:STAN) Interim Results sees PBT of $3.12bn ($2.84bn), which was in line with expectations with loan impairment losses declining 60% to $437m. It added that it had seen an encouraging start to the H2.   

Shares in Standard Chartered are lower 4.49% as the bank was always going to have to pull an HSBC-like result out of the hat to impress the markets.

Legal & General Interim Results saw operating profits on an IFRS basis rise to £542m (£404m) with worldwide new business sales on an annual premium equivalent basis ahead 18% at £881m. The dividend is raised 20% to 1.33p a share adding that the outlook for its markets in the H2 of 2010 and 2011 continues to be mixed.

Next Q2 Trading Statement sees it raise full year guidance after reporting a 1.3% increase in total retail sales ex VAT for the 26 weeks to 31 July.  It expects total retail sales in H2 to be in a range of between -1.5% and 1.5% and full year PBT between £535m and £560m. Next added that it intends to raise the dividend by at least 10%. 

British Land Q1 Results saw a 2.2% rise in net asset value to 515p with PBT up 3.2% at £64m and proposed maintaining its dividend at 6.5p per share.




 

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