Betters split on future for Footsie

SPREAD-betters appear to be getting it right at the moment, in everything from telecoms to IT. And this is despite divided Footsie sentiment.

The market's temporary break above 4800, taking the index's gain this year to 6%, hasn't fired traders with optimism. In fact the investor sentiment indicator has swung down. Last week spread-betters were making 3 buy bets for every 2 sell bets in the index. That's all changed this week as traders are taking a more cautious stance over the Footsie's future, with an equal number of sells to buys.

So can the market manage a final push for the year, and reach the technical and psychological 5000 target? It's a split decision, with optimists holding their positions and their breath, while pessimists make short-term sell trades.

Betters have been ringing in the profits in the telecom sector. Mmo2 results were perfect for traders. A spread-betters favourite, most have won and lost plenty of bets earlier this year as bid speculation abounded and spread-betters still have the 'buy bug'. This was good news, as positive company results fizzed shares to new 2004 highs at 117p, and well deserved winnings for all!

For an adrenaline fix, spread-betters focussed on Computacenter as shares went on a rollercoaster ride. News of a poor contract re-negotiation crushed shares on Thursday from 320p to 275p. But spread-betters were jumping for joy.

Many sold shares around 300p and had been sitting on losses. Computacenter's woes were spread-betters salvation, shooting their trades into profits. Downgraded to 'neutral' by Merrill Lynch, the broker estimates this re-negotiation is likely to impact company profits by £9m. The future is far from certain, and traders are enjoying the ride!

This column is written by easy2spreadbet.com. For more news, views, commentary and tools, click here.