It has been an eerily quiet day on equity markets today with global indices making little significant progress in either direction. There have been several economic announcements this morning, most have had little impact on market sentiment. The more recognisable reports have also caused little reaction as their results were in step with expectations. There is a positive bias on US markets on news of restructuring at one of the world’s largest company and a potential boardroom battle at Yahoo which could put the Microsoft deal back on.
The key inflation driver, oil is doing a good job of refusing to die down and consequently energy stocks such as BP and Shell are the better top tier UK performers today. With inflation still on the rise in the UK, traders are buying into oil stocks as an inflation hedge not just as an oil play. The financial sector is again under pressure as traders punish Barclays primarily due to the indecision over a potential rights issue. With tomorrow being options expiry Friday, we expect volatility to pick up again as we end the week.
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