dailymust After so many days where markets have struggled to get a sense of direction, this morning we saw a decisive move downwards.

Market Close Comments

October 23, 2012 | Filed under: Comment & Opinion | Posted by: IG Index

After so many days where markets have struggled to get a sense of direction, this morning we saw a decisive move downwards.
A combination of poor company figures and Moody’s downgrade of five Spanish regions debt to ‘junk’ status has seen the wind taken out of markets’ sails and a distinct ‘risk off’ attitude from traders. This action will prevent numerous investors from being able to hold it and although it might not force prime minister Mariano Rajoy into applying for EU bailout funds, it will certainly reduce any wiggle room that he might have had.
In the midst of the US reporing season, this morning it was the turn of the FTSE’s companies. Unfortunately there was not much to be optimistic about, after Mulberry Group posted a profit warning, which saw the share price drop by more than 20% over the day. Whitbread did post better-than-expected figures, mainly due to its Premier Inn and Costa Coffee subsidiaries outperforming, but its forward-looking projection made for very gloomy reading. Chip manufacturer Arm Holdings managed to buck the trend mainly due to the continuing success of Apple, posting an increase of 19% in Q3 sales along with a very healthy order book for the final quarter.
Once again Greece was heavily involved with setting the tone for markets. The ongoing inability of the three Greek coalition parties to agree on the necessary budget and job cuts, in order to ensure the Troika deposit the next tranche of funds, has left markets far from convinced that Greece has the long-term ability to chart a course to calmer waters.
Market comments from Alastair McCaig, Market Analyst, IG