Spread Betting Stock Market Indices Tumble

Posted on | May 14, 2010 |

European Indices tumbled on Friday with the FTSE 100 and DAX falling at least 1%, whilst the IBEX was the main sufferer, losing 4% as deficit issues continued to weigh on sentiment.

Investors are having to recognise that as economies start to get to grips with the important fiscal cuts needed to reign in deficits, consumers will have less cash to spend and this could impact on company earnings and economic growth. The outlook warnings from Sony, Cisco and Kohl over the last 24 hours have provided a stark reminder of this.

Trading has been particularly choppy with traders refusing to let their gains run in fear that they may lose them and it is this quick position taking that is hampering any upside momentum Indices are able to garner for now.

We have seen investors continue to move money out of the banks and miners and into the safe havens of the US Dollar and Gold. This has helped the US Dollar Index to rally to a new yearly high whilst Gold continues to trade near record highs.

The miners, banks, retailers and energy sectors are all heavily weaker today and this insinuates that investors are happy to close out some of their gains as the week draws to a close, particularly after the previous 2 weeks of hefty losses.

Please remember that Spread Betting and CFD Trading are leveraged products that carry a high level of risk to your capital and can result in losses that could quickly exceed your initial outlay. These products may not be suitable for everyone, so please make sure you fully understand the risks involved.

By Joshua Raymond, Market Strategist City Index.

The above should not be construed in any circumstances as a recommendation or offer to sell or recommendation or solicitation of any offer to buy any security or other financial instrument.

Neither City Index not Spread-Betting.org warrant or represent that the material is accurate, complete, not misleading, or fit for the purpose which it is intended and it should not be relied upon as such.

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