CFD Traders Diary
More two way action as Footsie cannot make up its mind
11/4/2008
Yesterday saw a flurry of action after the 25 basis point interest rate reduction, but by the end of the day the FTSE 100 index was just slightly down. Today saw a decent mark up at the open, but once again shares have drifted back so we are stuck in a short term trading range.
That said, there is plenty going on under the surface, and yesterday it was noticeable that the mortgage lenders were still seeing selling, with Bradford & Bingley in particular seeing a fall towards its previous lows. Given the stories about more US sub-prime write offs, traders need to be very selective in this sector because whilst some constituents have recovered well, many banks are clearly not out of the woods yet.
On the upside, the strength in British Energy that we have previously flagged has continued on stories that there may be more than two potential suitors for it RWE's indicative offer at almost 700p. The shares stand at 744p, and the advice to buy on a bid still stands.
Shares in Cadbury Schweppes have been steady recently and there was an element of reassurance as it reported a strong start to the year today. Although it said its demerger remains on track, investors still view the longer term outlook as dull at best and this is reflected in a slight drift at the open. We see few attractions here until the meat and bones of the demerger are released.
