Greater London, England -- (SBWIRE) -- 10/26/2010 -- Joshua Raymond, Market Strategist at spread betting provider City Index (http://www.cityindex.co.uk) commented:

“Profit taking in the miners and some speculative buying back into key financial stocks which fell heavily yesterday is keeping European Indices rather flat this morning.

We have the mining sector fall lower by 0.6% despite the stronger Copper prices, which points to profit taking in key mining stocks such as Xstrata and Antofagasta, whilst UK banking stocks have rallied around 2%, keeping the FTSE in flat territory.

In truth, it’s been a particularly quiet start to the trading session, which is of no real surprise being a Friday, but we could get some excitement from US data and Fed Chairman Ben Bernanke later this afternoon.

Bernanke speech eyed
Traders are also a little apprehensive with key US economic data to come in the afternoon including Consumer Price Inflation, New York State Manufacturing and Retail Sales. We also have Bernanke speaking later today too which will demand a large focus in case he confirms what many in the market are now expecting, which is a second phase of quantitative easing from the Fed.

We are now two and a half weeks away from the next Fed meeting where the market expects QE2 to be announced and so its hard to see whether Bernanke will add to the clues he has already given investors recently that the Fed are preparing to act in today’s speech. Traders will keep an eye on things just in case however. The speech takes place at around 1pm UK time so we could certainly see some volatility in the US dollar, commodities and mining stocks at this time, particularly as volumes are not expected to be very high this afternoon.

Insurers weigh
Insurers have also been a key drag on the FTSE this morning, with the sector down by 1.3% in early trading with Old Mutual the worst performing stock on the FTSE 100, falling 3.9%. Old Mutual shares have been hurt by a report in the Financial Times that HSBC could pull out of a bid for South Africa’s Nedbank, which Old Mutual has a majority holding in. A downgrade on the insurance sector by Citigroup has added to the sectors woes this morning and convinced some traders to downsize positions in Insurance firms too.”

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