After such a boring morning, with investors firmly sitting on their hands, the markets lost their bottle this US-less afternoon.
Despite both the pound and the euro losing ground to the dollar – cable fell back below $1.399, while the single currency dropped towards $1.238 – the European indices soured as the day went on. They were quite uniform in their decline, with the FTSE, DAX and CAC all roughly falling half a percent. That left the UK index barely above 7250, having touched 7330 earlier in the day, with its German peer below 12400 and their French cousin at 5260.
It was hard to ascertain exactly what caused Monday’s late reversal. For the FTSE a copper-led decline in its mining stocks – which have a busy week of reporting ahead of them – certainly contributed, as did Reckitt Benckiser’s post-full year results 5.5% decline. The lack of news from the US likely didn’t help, with investors seemingly craving reassurances that the Dow Jones is willing to continue last week’s recovery before following suit.
Regardless, the fact that the markets have turned negative on a day almost completely devoid of anything interesting news-wise perhaps gives an indication where sentiment currently lies.
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