Weakness in energy stocks and a late sell off in the banking sector forced European markets lower on Wednesday with the FTSE, DAX and CAC all lower by over 0.5%.

Today has been largely about profit taking. The FTSE 100 spread betting market has rallied almost 13% since the start of the month and investors have been happy to start banking their gains. With the end of the month approaching too, naturally there could be a bit of position settlement and from a technical perspective there is a bit of resistance at 5400 on the FTSE.

BG weighs

BG shares weighed on the FTSE Index after the gas firm reported a $443m non-cash charge, which pushed net earnings down 21% to $602m whilst production fell 2%. Shareholders were left unimpressed by the results and sold some of their holdings in the gas company, forcing shares down by as much as 40p to a new 3 week low.

Late sell off in banks

There was a late sell off in the banking sector with Lloyds the main faller after the bank suspended plans to sell its 60% stake in St James’s Place Capital.

Earlier in the session, banks had received a boost after the sector was upgraded by Deutsche Bank to neutral, from underweight. However, with the banking sector having rallied over 20% since the start of the month, hitting a new 3 month high today, investors have been particularly eager to start banking their healthy profits and this is playing a large part of today’s weakness.

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Spread Betting and CFD comments by Joshua Raymond, Market Strategist, City Index.

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