Greater London, England -- (SBWIRE) -- 01/18/2011 -- Joshua Raymond is Market Strategist at financial spread betting provider City Index (http://www.cityindex.co.uk/). Here, he takes a look at the EU markets on 14th January, with news surrounding China, Intel and JPM.
“A forecast beating set of fourth quarter earnings from Intel last night is helping to encourage buyer demand for tech stocks across Europe today whilst a move by China to raise the rate of bank reserve requirements by another 50 basis points triggered stock selling in mining stocks. The selling in mining stocks was a bit of a knee jerk reaction to the move by China with investors fearing moves by China to curb spiralling inflation could suppress metal demand.
It was the news from China that forced heavyweight miners lower and as a consequence, the FTSE 100 traded below the 6000 level once again.
We have seen many investors sit on the sidelines for the morning session awaiting results from bank JP Morgan, due out at lunch time. JP Morgan’s earnings could help to set the tone for UK banks reporting their numbers in February and so there is a large UK following watching their numbers.
Tech stocks across Europe are being firmly boosted by Intel’s forecast beating numbers, and this is to be expected with Intel being a tech stock bellwether. Intel’s numbers beat most expectations by around 10% and so we are seeing investors connect the dots from Intel’s earnings to other similar tech stocks trading in Europe to which this may paint a similarly rosy picture. We are therefore seeing buyer strength in stocks such as ARM Holdings, which is higher in London by 8%.
The Tech sector in London has started the year hugely promisingly with gains already of 8% for 2011. Inevitably the recent strength in tech stocks and ARM in particular, which has now rallied 28% this year alone, heightens the potential for sharp bouts of profit taking if lots of investors decide to cash in all at once.”
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