Closing Market Comments 9th December

Going into the last few minutes of trading, it has been another strongly positive day for the UK market.

Today’s performance may come as something as a surprise considering the amount of gloomy economic news out first thing. Retail sales have fallen for two months on the trot, manufacturing output has suffered its biggest fall since 2002, and a severe lack of volume in the housing market. But after a brief early wobble the FTSE managed to shake this off and spent much of the day pushing higher.

Today’s strength has put the index back to levels not seen for the best part of a month and at the moment this momentum is showing no signs of slowing. It seems that investors are still happy for now to ignore the gloomy, but hardly surprising, UK economic news and to speculate that the plans announced by president-elect Obama are going to help limit any more significant deterioration for the US economy. It would probably be a bit ambitious to suggest the current optimism is going to continue for very long, but at the moment further gains for UK stocks look possible - with some traders even eyeing a run back towards the November index high at 4700 as the potential next big level to watch.

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David Jones is Chief Market Strategist at IG Index. We do not endorse the information and analysis available in this comment and it is provided purely for information purposes only and is delivered as a personal view by the writer. Under no circumstances is the information in this comment to be used or considered as an offer to sell, or a solicitation of any offer to buy. While all reasonable care has been taken to ensure that the information contained herein is not untrue or misleading at the time of publication, we make no representation as to its accuracy or completeness and it should not be relied upon as such. The investments referred to herein may not be suitable investments for all persons accessing this page. You should carefully consider whether all or any of these are suitable investments for you and if in any doubt consult an independent adviser. We accept no liability whatsoever for any direct or consequential loss arising from use of the information on this web page. Please see our Terms and Conditions.

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