TD Waterhouse Top Ten - election special
Angus Rigby, Chief Executive Officer, TD Waterhouse comments: "This morning the UK woke up to its first hung parliament since 1974, with no party winning enough seats to secure an overall majority in government.
"This news follows falls on the US and Asian stock markets due to concerns that the ongoing debt crisis in Greece could have a knock on effect on the global economic recovery. Although there are rumours this morning that the huge drop in the Dow Jones yesterday, which fell by over 900 points at one point, could have also been a result of human error when a trader accidently entered a trade for Procter and Gamble as billions rather than millions.
"However, these combined events have put pressure on the FTSE 100 this morning, which opened at 5,260 before falling to 5,160 by 8.31am. At the time of writing the FTSE 100 had regained slightly, standing at 5,182 (by 10.13am).
"The markets have been anticipating today's election result for some time and a quick look at our early trading activity shows that our customers have continued their buying trend. The banks in particular take up the majority of our customers' trades accounting for approximately 60% of the morning's top ten. Overall, our top ten buys outweigh sells by 32%, while bank buys outweigh sells by 51%."
Angus Rigby continues: "In the days leading up to the election, buys were also more than double sells as our customers took advantage of a decline in the FTSE100 amid lingering concerns about the Greek debt crisis. Banks continued to dominate trading during the week ending Tuesday 4th May, occupying the top three buy slots and the top two sells, while trading in BP plc (BP) increased as the company battled a leak at one of its wells in the Gulf of Mexico."
"Lloyds Banking Group (LLOY) replaced The Royal Bank of Scotland Group (RBS) as the number one buy as it completed its first issue of residential mortgage-backed securities in two years, with a £3.4 billion offering that attracted strong demand from investors and bolstered the bank's balance sheet. Barclays (BARC) also moved above RBS in the buys list, though RBS remained the most-sold stock among our customers, accounting for more than a quarter of sell trades in the Top Ten.
"Trading activity for BP increased as the company's shares fell on concerns about the oil spill off the US coast and the resulting clean-up bill, propelling the oil major to the third most-sold stock and the fourth most-bought among our top ten. Our customers trading in BP shares jumped more than fourfold as a slump in the stock wiped billions off the company's market value."
"Mining companies also featured strongly among the top ten this week. Xstrata plc (XTA) was the fifth most-bought stock, while Rio Tinto Group (RIO) was sixth, as customers took advantage of declines in shares of both companies after the Australian government announced plans to impose a 40% tax on miners' profits. Rival miner Kazakhmys plc (KAZ) entered the top ten as it announced a joint venture with China's Jinchuan Group.
"Among other new entrants to the top ten, HMV Group plc (HMV) was the tenth most-bought stock among our customers after the retailer released its pre-close trading statement and Marine equipment manufacturer Raymarine (RAY) featured among the top ten sells after US rival Garmin announced a 15 pence a share takeover offer for the company."