Friday’s Wall Street sell-off prompted by tapering comments from James Bullard
has largely been shrugged off in Europe this morning, as markets take their lead from the success off Angela Merkel’s conservative party in German election polls this weekend.
Fears that the Chancellor would struggle to form a majority coalition seem unfounded, with the conservatives falling only marginally short of an overall majority. Her historic third term in office will likely see Merkel under even more pressure from voters opposed to the continued bailouts of weaker peripheral European economies,
though her ability to force through such measures for the greater good of the Eurozone thus far is to be admired.
Mixed PMI data from Europe this morning
saw Services significantly outperform the Manufacturing measure, though market reaction was relatively muted.
On the single stock front the recovery in Aberdeen Asset Management
continues apace, with the stock trading 10% above the lows seen in the aftermath of the Morgan Stanley downgrade last week. Investors will be wary on the impact for their emerging markets funds when QE tapering eventually begins, with developing markets having proved particularly sensitive to taper chatter in recent weeks.
At the other end of the index FTSE
newcomer Coca Cola Hellenic
have slid lower for a third consecutive day, as traders take profits from the highs of last week – the best levels since the stock moved to the London market in April.
In the soft drinks sector mid-cap rival AG Barr
are up 2% after announcing strong sales on warm summer weather in the UK – a rare treat!
Nomura and Canaccord both responded with positive notes early on, with the latter arriving at a 630p medium-term price target.
A quiet afternoon calendar might well see us take our lead from US markets
as traders the other side of the pond continue to weigh up the likely timescale for a reduction in the Fed’s asset purchases.
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