European indices have pushed higher in early trade, but the FTSE 100 is down 30 points as a stronger pound takes its toll.
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Indices struggle to find bullish catalysts.
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Pound rallies on hopes of stronger UK economy.
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Persimmon leads homebuilders higher.
It looks like it will be a day of drift and indecision for markets, thanks to a light economic and corporate calendar. European markets have made gains however, taking their cue from the broadly positive session for Asia overnight. A rise in cases in Hong Kong has added to the growing list of places where the virus has seen a resurgence, although for the time being indices are content to hold their ground, avoiding much downside for the time being. But with breadth weakening across indices we may be poised for some near-term downside, particularly if earnings season starts off on a poor footing. While the dollar has rallied in early trading the overall move lower for the greenback continues, helping to bolster the euro and sterling. The latter in particular has enjoyed a good few days, and yesterday’s statement from the chancellor confirms that the UK government is looking to keep providing stimulus in various forms, even if the amounts discussed on Wednesday are smaller than those seen earlier in the year.
In a taste of earnings to come, Persimmon was keen to stress that the outlook for the second half is looking stronger, with a rise in the order book providing some much-needed positivity for investors. The news has bolstered housebuilder stocks in London, helped along by yesterday’s changes to stamp duty that may well continue to support the UK housing market.
Ahead of the open, we expect the Dow to start at 26,024, down 43 points from Wednesday’s close.
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