CFD Traders Diary
Financials burst into life with a three figure rise on Footsie
25/2/2008
A fine start in London has been driven by a big change in sentiment towards the financials which as we have been saying hold the key to where the market is headed next. It would seem that the bombed out losers such as Alliance & Leicester and Bradford & Bingley are now considered fair game for a potential takeover, and over the weekend there was talk that Lloyds TSB was assessing whether there is value in these stocks.
In terms of volume, the buyers have not really shown their hand yet, but it is also interesting that the scale of share price falls on bad news has lessened. This is bullish in the short term, so we look to statements from HBOS on Wednesday and RBS on Thursday.
Another volatile sector worth consideration is property, and there was some reassurance from Hammerson today as it reported a 3% rise in full year NAV, while adjusted profits and earnings both improved markedly on the year before. It expressed some confidence for the future despite current uncertainty and given the big discounts to NAV in the sector, the shorts have been very quickly squeezed. We saw a similar move with SGRO some weeks back, and if the morning's rally can hold on the day, it would be extremely positive for commercial property.
