John Dance

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European equity markets maintained their upward trajectory in early trading, with other risk assets also benefiting from the passage of Greek austerity during the previous day’s trade. Whilst we attempted to refrain from mentioning the European debt crisis in today’s report, global markets saw sharp increases around 14:30 (UK time) as news broke that the Greek parliament had passed the specific legislation relating to Wednesday’s 5 year austerity package. The FTSE ended the day strongly to finish up 90 points at 5945.

The US also started strongly on a day that not only marked the end of a fiscal quarter but also saw the conclusion of Federal Reserve’s $600bn asset purchase program “QE2”. The Fed’s lack of clarity with regard to future monetary policy, in particular the potential for “QE3”, is matched by the uncertainty surrounding the effects that this unprecedented policy has had, or would continue to have, on financial and commodity markets.

In particular, what effect will the conclusion of the program have on Treasury yields (with a significant buyer out of the market and with plenty of stock to sell), and will it cause a reversal in commodity prices, the alarming increase in which is widely attributed to the extra liquidity that was pumped into the financial system.

Banks faired particularly well in the UK blue chip index, with Lloyds leading the ascent and finishing up 9.73% on the day to 49p. Sentiment was boosted in the troubled bank as the CEO Antonio Horta-Osorio announced that it would cut up to 15,000 jobs in a bid to achieve £1.5bn worth of annual savings by 2014.

Locally, the full year results of Northgate PLC, the commercial vehicle hire company, were welcomed by the market which saw the shares put on 5.8% to 328p by the end of the trading day. The group managed to maintain its market leading positions in the UK and Spain despite difficult economic conditions, seeing its operating profit increase by 28%, its basic EPS up 8% to 29p, and its net debt reduced by £68.4m to £529.9m as a result of strong cash generation.

Immunodiagnostic Systems Holdings continued its recent rally to end the day 6.1% higher at 1058p, roughly a 12% increase since the announcement of its full year results on Monday and an all time high for the group’s shares.

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

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