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Market consolidation ahead of European GDP data

Markets closed the day marginally lower today, although still within a narrow trading range and on low volumes as has been the case for the last few trading days. Part of the selling pressure was a result of weaker than expected economic data from Japan overnight, as GDP for the second quarter came in at an annualised rate of 1.4%, considerably shy of the 2.7% forecast by economists. The news provided further evidence of how the slowdown in Europe is being felt globally, and also hinted to a weak environment in neighbouring China.

Elsewhere, we learnt that Greece’s economy had shrunk 6.2% on an annual basis in the second quarter, and whilst the depression is set to deepen over the coming years, this was not as bad as economists had forecast. Markets appeared to almost be in a wait and see mode

The FTSE 100 finished the day down 0.25% at 5831, falling less than major US indices that were lower by around 0.5% at the time of writing. There was little in the way of big corporate moves today, the exception being the Oil & Gas services firm Petrofac, which fell 5.2% by the close in response to its first half results. Whilst current financial results appeared to be in line if not better than expected, comments about contract delays in 2012 introduced some uncertainty over next years earnings projections, which appeared to be the catalyst for the selling.

In the commodity space, Brent oil rose 1.2% to around $114 per barrel on concerns over supply disruption following rhetoric form the Israeli Prime Minister that highlighted the country’s opposition to Iran’s nuclear program.

This was posted in Bdaily's Members' News section by James .