FTSE now recovering steadily

European markets have started the week positively, supported by a drop in natural gas prices. The European Netherlands TTF contract has seen natural gas prices fall to their lowest levels in almost 18 months. The FTSE 100 has recovered after dropping below 7,900 last week and is expected to reach a new record high. However, there has been some underperformance in the energy sector due to the weakness in oil and gas prices. This has been offset by the resilience seen in industrial and consumer staples. Stocks such as Weir Group, Spirax-Sarco Engineering, and Smiths Group have outperformed due to their rating as ‘buy’ and preferred picks for Goldman Sachs.

The housing sector saw a little bit of weakness as Deutsche Bank reduced Persimmon to “sell,” while Taylor Wimpey and Barratt Developments were cut to “hold” from “buy.” Meanwhile, Cineworld shares are up on reports that Vue has lined up financing to bid for the indebted cinema chain.

US markets have opened higher following the cues from the European session. The tech sector is leading the gainers, with the Nasdaq 100 outperforming. Manchester United shares spiked by over 5% in early trade on reports that Qatar is on the verge of preparing a bid.

Gold prices are slipping towards support at the $1,850 area and the 50 day SMA, while crude oil prices have slipped back from last week’s peaks. The New Zealand dollar has been the best performer after January services activity jumped to a three-month high. The US dollar gained strongly against the Japanese yen as reports continue to emerge that Kazuo Ueda will become the next governor of the Bank of Japan.

Shares in Standard Chartered saw a short-lived gain last week after the idea that First Abu Dhabi Bank remains interested in buying out the company resurfaced. However, takeover rules mean that they cannot make another unsolicited approach for a few months. One day volatility on the banking cohort sat at 41.4% against 22.61% for the month.

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