London, England -- (SBWIRE) --05/17/2011 -- Joshua Raymond, Market Strategist for spread betting and CFD trading provider City Index (http://www.cityindex.co.uk/) looks at European equities.
European equities opened up lower on Monday with investors cautious to buy into stocks ahead of the meeting amongst EU finance ministers to discuss the euro zone debt crisis. Traders are awaiting clarity on how they see the Greek situation progressing, particularly in the context of a debt restructuring and of any mandatory austerity clauses that may come with it.
Strauss Kahn arrest unlikely to impact IMF’s strategy in short term
The arrest over the weekend of Dominique Strauss-Kahn, the IMF’s Chief, has done little to upset stock markets today, whilst the Euro, having initially suffered in early trade, has bounced back to gain against the dollar and sterling.
Naturally traders are attempting to speculate as to what the impact of no Strauss-Kahn could have on today’s talks with EU finance ministers on Greece. The truth of the matter is it is likely to make little difference. Manchester United would have still won the Premier League title without Sir Alex Ferguson at the game against Blackburn Rovers over the weekend and the IMF’s goals will maintain in the short term until there is clarity over the validity of allegations made against the IMF’s leader.
In truth, the allegations over the weekend may have only served to speed up Strauss-Kahns expected departure from the IMF. Dominique Strauss-Kahn had been long expected to run for the French Presidency next year, and had he done so, a change in leadership at the IMF was likely to be only months away.
The impact of Strauss-Kahn not heading up the IMF, should this turn out to be the case, could be more in the shape of a change in long term strategy, particularly if his replacement is non European. The ‘special relationship’ between the IMF and Europe has been long heralded over the last few years. Under Strauss-Kahns’ stewardship, the body has been hugely beneficial in attempting to proactively stabilise the euro zone debt situation, and so a new leader may attempt to strengthen the IMF’s scope of activities to outside of the euro zone, particularly emerging markets and helping to correct the global imbalances of currency manipulation, in an effort to encapsulate the true sense of the term ‘International’ Monetary Fund.
Mining sector hits new 1 month low
Strength in the mining sector has helped to prevent the FTSE 100 from enduring a more grievous fall this morning than the 0.6% already posted. The mining sector itself hit a new 1 month low earlier this morning before buyer interest helped to pick lift mining stocks such as Rio Tinto and Xstrata to gains of 0.5%. However, with Copper prices off this morning, all gains in the sector are being kept on a leash and indeed we have already seen traders reverse some of the buys placed this morning.
Dixon’s shares jump 6% after results
Dixon’s shares hit a new one and a half month high today after the electrical goods retailer announced profits for the year of £85m, in line with previous forecasts. However, the share price rise is born more out of dampened expectations than shareholders cheering a stellar set of results. After the company issued a profit warning in March, saying that like for like sales had dropped significantly, there had been fears of a further deterioration in sales. It seems investor fears of this have been eased somewhat from today’s numbers. Dixon’s share price has lost around 40% in the last six months trading as investors fear poor sales for top end goods as consumers cut back in the tough economic environment.
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