While a collapse on the scale of England’s batsmen was never on the cards this week for London markets, the FTSE 100 continued its sideways drift approaching the end of the year, frustrating bulls that are still eyeing a 6000 Christmas present. Scant corporate news other than the BP lawsuit offered little stimulation, with traders hoping that strong performances in the US overnight and the right sounds coming out of the EU summit in Brussels would propel the index over 5900 and beyond.
Angus Campbell, the head of sales at trading firm London Capital Group noted that “the failure now on four separate occasions for the market to get over and remain above the 5900 level is not very encouraging for the bulls but there’s a feeling that since we’ve been grinding higher and flirting with that level that at some point before the year end there might just be enough of a bear squeeze to pop us above and on towards 6000.”
London’s junior exchange, the Alternative Investment Market, continued to gain ground, reaching 887 during Friday, cancelling out declines that took hold late in the week. Overall, the AIM All Share Index (.FTAI) has performed strongly during 2010, having opened the year at 665. A surge starting in late August saw the index add 200 points in four months – taking it back to levels not seen since July 2008.
Despite the FTSE 100 drifting, there were some 144 new 12 month highs and 44 new 12 month lows (up from 32 lows last week). Speculation over whether London markets can continue their run into the new year is focused on macro factors that could pull them off-course. Terrorist incidents, US and European economic policy and the overall stability of the eurozone have all been mooted. As Andrew Strauss is finding out, the confidence of a good start can quickly dissolve.
Drilling for Glory
Amongst the stars this week, potash mining group Sirius Minerals (LON:SXX), newly renamed following the start of drilling at its North Dakota property, hit a new high. The stock was up 19% this week alone following announced results and in anticipation of forthcoming drilling news. It reported a pre-tax loss of £1.0m for the six months to September, with cash at September 30 of £3.1m, but Chairman Chris Catlow noted…
