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CFD Traders DiaryBig rise in London reflects strong world equity movements2/5/2008 There is a good feeling to equity markets right now on talk that the worst of the credit crunch is over and on hopes that M&A activity will reappear, especially from the private equity sector. Some of the stocks hardest hit on the way down are the big winners so far with next up a hefty 5% and Alliance & Leicester not far behind. Barclays also up despite the widely reported departure of Paul Idzik, COOI and one of the key architects within the efforts by CE John Varley to overhaul the bank's culture and management. In the same sector, RBS is rallying on a press report that private equity firm Texas Pacific Group is considering a bid for its insurance arm. Given all this potentially good news in the bank sector, the cynic might argue that we are close to a short term top, and we would have to agree. At the bottom end, our view that gold would fall to $850 has worked well in the last two weeks, and the miners are weak again despite the strong market. We see no reason for this to change in the short term against the background of a strengthening dollar. Another area to watch on the downside is property after Capital & Regional's big fall yesterday on concerns that its flagship fund had breached its banking covenants. After the market closed it acknowledged the market concern around the capital structure of the Mall Fund, and despite an early bounce short positions should be considered here. |
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