European stock rally falters after triple witching

Nick Serff, Market Analyst, City Index commented: "Stock markets across the globe traded down towards their lows for the day into the European close on Friday, as holiday season fast approaches. Most of the action was to be had earlier in the day on the expiry of FTSE and DAX futures. Both markets rocketed skyward during the expiry calculation period as investors scrambled to protect option premiums. During the calculation period traders managed to push the price of the cash FTSE to 5287. However after the expiry window passed prices slowly drifted back to prior levels.

Banks shares continued to be the main drag on the FTSE 100 throughout the day after yesterday's news from the Basel Committee. The new rules proposed by the committee could potentially put tighter controls on banks risk exposure from securities and derivatives. Although stocks like Lloyds, RBS and Barclays all nursed losses on the day, investors have been keen to pick up stock around current levels.

With holiday season now very much upon us stock indexes are expected to remain within their recent narrow ranges on light volume. Next weeks trading activity could be mainly focused around the possible continued weakness of the Euro and Gold markets. Investors will be monitoring the 1100 Dollar level on the price of spot gold and the 14250 support zone on Euro Dollar. The main highlight of a shortened trading week next week will be UK GDP data, due to be released Tuesday morning."