European markets make small gains in quiet trade

Joshua Raymond, Market Strategist at City Index commented: "European equities made some small gains in a largely quiet morning session with investors remaining cautious ahead of tomorrow's Pre Budget Report and Thursday's MPC Rate decision.

It has been a really quiet morning session. Clearly investors are sitting in two camps at the moment. In one camp, investors are ultimately winding down their trading activity as we head closer into the holiday season whilst the in the other camp, investors are slightly apprehensive as we head into tomorrows Pre Budget Report. And in both camps, investors are firmly waiting on the sidelines and this means equities are unlikely to go anywhere fast right now.

With a lack of macro economic data out of the US this afternoon too, it may well be a largely uneventful day.

From the limited trading activity we have seen, investors have been buying into energy firms on the back of higher crude oil prices. Copper prices have also strengthened today and as such, the miners have some small gains.

Advertising firms stronger

Firms that are leveraged in advertising spend such as WPP, Pearson and BSkyB lead today's gainers and have been in high demand this morning after McGraw-Hill's CEO Mr McGraw was upbeat regarding ad spend prospects for 2010 and ZenithOptimedia upgraded its media buy forecasts also.

The news is helping to promote the fact that advertising spend could be set to track the wider market recovery and grow in 2010, which is a big positive for WPP, Pearson and BSkyB who all rely on high advertising demand for revenues.

Defensives higher

The defensive stocks are also making gains today and this exemplifies the fact that investors are feeling slightly apprehensive ahead of tomorrows Pre Budget Report. From the limited demand there has been this morning, the majority of which has been for pharmaceuticals and tobacco firms, both traditionally defensive sectors."

For more information, visit cityindex.co.uk.