Is the FTSE going to tank on Monday following the downgrade news?

at11

Looks like the opposite had happened, not complaining though,
thanks for all the opinion and insights

miketaff1408

merlingrey wrote: »

Most of the impact will be seen on the £ vs $.

Probably will trade to $1.35-£1 by the end of spring at this rate.

Yep. you were right. £ vs $ at 2 yr low. £ = 1.514 at the moment.

dunstonh

at11 wrote: »

Looks like the opposite had happened, not complaining though,
thanks for all the opinion and insights

Remember that companies are valued on a global scale. So, the movements in sterling will change the value of UK listed companies. This can make them more attractive or less attractive to overseas traders. That can then cause the market to move accordingly.

Reaper

Yes, a fall in sterling makes UK exports more competitive so can lead to a rise in the stock market as companies make more profit. Hence the current "race to the bottom" as countries try to trash their own currencies. So the good news is this might actually help the stock market, the bad news being it will make inflation worse as weaker sterling makes imported goods more expensive.

sabretoothtigger

StevieJ wrote: »

I should imagine that 175 billion of extra QE coming our way will have more impact (positive) on the stock market than the credit downgrade.

Sell off in bonds probably helps shares yep.

FTSE is not Britain, even UK companies operate abroad. Tesco is big in Malaysia?

USA bonds went up in price when they got downgraded. Somehow they became more valuable, probably still true now.

There is negative effects to what government has done but a credit rating is a trailing factor not a determiner of performance. Eventually cost of borrowing will be high but nobody is close to calling that so I guess no crash till then

If you want to measure stocks crashing in value not price, measure it vs gold and we been falling since August 2009. Warren Buffet has been losing for over a decade and he's done better then most

Sterling Index At 1000 GMT

(JAN 2005=100) INDEX GBP/USD EUR/GBP
PREVIOUS CLOSE 79.4 1.5267 0.8621
OPEN 78.5 1.5139 0.8734
10 AM 78.5 1.5143 0.8742

February 25, 2013 05:05 ET (10:05 GMT)

Or if I swear off the shiny stuff and just use sterling index falling.

21.5% lost since 2005
FTSE 4815
Now 6372
Adjusted that makes 5002 and ignores dividends. So on this measure we are up 3% in 8 years but FTSE mostly gives income not growth.

try to trash their own currencies

They dont have to try, its easy. If less money paid made us more competitive we'd be doing better not worse.
I think they do avoid an overt crash with cheap money while promoting a failure for UK to earn value so depressing business activity.

It only helps stocks if you borrowed money to buy them, then by arbitrage you gain more then you lose but most people are earning sterling so are not gaining or becoming more competitive, the word is poorer

Thrugelmir

sabretoothtigger wrote: »

FTSE is not Britain, even UK companies operate abroad. Tesco is big in Malaysia?

How many Companies have a FTSE listing for the prestige but actually do very little trade in the UK?

sabretoothtigger

Tons. Did you know London has the worlds largest silver mine. I wonder where they put it, must be via the tube
It is a positive they want to list here and pay some tax but a bad currency would change that I reckon

30% of BP is via Russia. Pretty sure the UK section of BP is not even close to that

Im sure someone has totalled it up better then I could but its the majority of the FTSE is not derived from UK business. Most accounts are totalled in Dollars hence in theory they see a nominal rise for revenue but possibly in costs also

From our point of view theres a positive, the dividends are sometimes paid in dollars. Its just most of us are having it converted to sterling first but there should be a few cases where payouts rise because of weak sterling.
I have one paid in euros, which sucks now but generally euro has beaten sterling over time

So being in shares is better then cash and savings, we get a automatic rise almost. But what I was trying to say with the sterling index example is even the 'wealthy' shareholders arent gaining really, the UK business doesnt boom either from what I see; the whole 'more competitive' idea is bs.

   [IMG]http://i.imgur.com/Pud6nu6.png[/IMG]






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Wywth

NPowerUser wrote: »

I predict about 150 point drop with it recovering down 75 to 100 points at the close.

You are Mystic Meg and I claim my £5.00 :cool:

(Actual results were up about 45 points at its day high, closing up, just shy of 20 points)

Thrugelmir

Seems the news was positive for banks. As lower exchange rate reduces their liabilities.

No wonder GO isn't concerned.....

cepheus

Pound sterling v Euro

As someone said the Italian election is more important!