Mike McCudden, Head of Derivatives at Interactive Investor, said:
“Traders are taking refuge from the continuing catastrophe in Japan. As the markets try to rationalise the short to medium term impact the aftermath of the Japanese tsunami will have on global markets, Interactive Investor has seen its spread betting clients make some classic plays amidst the panic selling.

“With danger to a nuclear power station in the news we have seen sharp downturns in the price of any company associated with this industry from uranium miners to steam turbine component manufacturers and an influx of investment in wind and solar and natural gas.

“Overnight and this morning we have seen short-term traders trying to sniff out buying opportunities amidst the sell off. Betting against the trend is fraught with danger and further negative sentiment in the coming days could well propel the market to new lows.

“There are further concerns that the stimulus plan announced by the Japanese government will not go far enough. The Japanese economy has limped through the last few decades and only recently shown signs of a return to optimism. The Government now finds itself printing a further 10 trillion yen to reassure the export trade and relying once again on its people to finance the relief effort.

“Many short positioned traders since the weekend have been locking in on some profits and waiting, along with the rest of us, to see what further developments come out of Japan.”