European markets climb on commodity strength
Joshua Raymond, Market Strategist at City Index commented: "The rally in the US markets towards the close last night and strength in Asia this morning has settled a lot of the nerves in the market that was created by yesterdays disappointing macro data and warnings of a downgrade from rating agencies over Greece's sovereign debt.
Looking at the rally today, it might be easy to think that yesterdays falls were overdone but I am of the belief that it shows just how on edge investors remain and how quickly sentiment can turn.
Yesterday's jobless data and the surprise fall in UK house prices for February emphasises that there remains much work to be done before investors can rest easy when analysing macro economic data.
What yesterday's spike higher in jobless claims and the market reaction shows just how much sensitivity there is towards the Us labour market by investors and this could play a role in how the market progress next week in the run up towards the Non Farm Payrolls next Friday.
Today's rally has been largely triggered by strength in the latter stages of the US markets last night and in Asia this morning which has had a calming influence on the markets.
However, trading ranges have remained fairly tight since the initial burst higher in the opening minutes of today's session, which suggests that many may have packed their bags early for the weekend.
UK revised Q4 GDP came in stronger than first expected at 0.3% but this has largely been ignored by equity markets. The main movers we saw was sterling, which immediately weakened after the data also showed that the recession was deeper than first thought, with contraction of 3.3% for the year.
Lloyds disappoint
It has been a bit of a slow news day with little corporate activity. The main news has been Lloyd's numbers disappointing, causing shares to slip and underpin an otherwise stronger banking sector. There may also have been an element of exceeded expectations having seen both Barclays and RBS both outperform with their respective earnings and this could also be pressuring Lloyds share prices."