Momentum stalls as traders look to the long weekend

The Chinese Shanghai Composite Index has led Asian markets higher but failed to sufficiently boost European sentiment.

- Asian markets rally into the weekend while Europe gives a little back
- Oil jumps by 10%
- Fashionistas watch their figures

As what feels like a very long week winds to an end, the Shanghai Composite has closed up 4.82% on the day however even with the last couple of days’ worth of bounce still sits some 40% off its summer highs. Considering the volatility that we have seen this week and the fact we are about to embark on a long bank holiday weekend, it is no real surprise that UK traders are taking the opportunity to unwind positions.

Not that traders have been short of options when looking for volatility to trade this week but the moves in the oil price over the last 24 hours have stood out in a crazy week, with both US light and crude jumping by more than 10%. The recent revelations that maintaining these low levels in oil prices by oversupplying the markets is currently costing Saudi Arabia something in the region of $20 billion, have raised concerns about its sustainability. It is quite likely that the pain of maintaining this will be felt even more directly by some of the less affluent OPEC members.

It has been a morning for the fashionistas on the city trading floors with both Jimmy Choo and Hermes posting figures. Once again with the premium goods retailers Asian growth has been particularly important with cautionary notes about future currency headwinds. Unsurprisingly the bounce in both oil and commodity prices has seen the mining sector components of the FTSE dominate the list of early market movers with the recently much maligned Glencore heading the list up by 2.5% on the day.