Punters start the new year short of the DOW and long of the EURO

Spread betting traders enjoyed a healthy December, many of them managing to ride the gentle upswings in the FTSE, the US Dow Jones and the Japanese Nikkei.

However bookmakers said today that punters have moved to a more bearish position on stock indices, believing that the Christmas rally is now over and, as in 1999-2000, the New Year may bring a hangover.

IG Index said that its clients sold the Dow in size on Monday when it got to the 10,860 level, close to 50% above its 2002 low. They are also net short the FTSE, IG said.

Finspreads said punters are very short of the Dow, although they remain long European indices such as the German Dax.

On currencies, punters managed to benefit from the pound’s weakness in the last days of 2004, but the main action is now on the dollar.

IG said clients were short of the US currency now, with some talking of 2.05 on the sterling-dollar “cable” rate. Finspreads said its clients were long of the euro at the moment against both the dollar and the pound.

Gold’s sharp fall early this week to $426-a-troy-ounce has knocked out many long positions in the precious metal.

The move has encouraged some punters to move to a short position on gold.

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