City Watch: Brian Tora reflects on an abrupt change in sentiment
- Credit: Archant
What a difference a couple of weeks can make! It was not so very long ago that I was bemoaning the failure of our benchmark FTSE 100 share index to break through into the new high ground to which we were tantalisingly close. Last week saw yet another negative week for UK shares, bringing the Footsie to its lowest level for a year.
What has been going on? Of course, it is not just here that investors have been jittery. Wall Street, which did achieve new highs this summer, has also retraced, while markets around the world have seen sentiment turn negative in the face of a dismal set of potential upsets. Geo-political issues, a deteriorating economic outlook in Europe and the likely effects of the Ebola outbreak have combined to send a shiver of concern over global economic growth prospects.
While Ebola’s influence is largely confined to African countries at present, which contribute relatively little to the global economic picture, there is no doubt that it is having an adverse effect. Growth in the once buoyant nations of western Africa has stumbled. This may have little direct consequences for the UK, but continental Europe, our largest trading partner, will impact on our economic fortunes if, as feared, there is a further downturn in activity.
All the expectations were for a dismal start to our market as this week commenced, but despite a difficult start, shares did bounce back yesterday. Given their poor performance recently, perhaps we should not be surprised. The FTSE 100 Share Index fell nearly 3% last week – half of that taking place on Friday. This followed a few dismal weeks and has made the prospect of reaching new heights look unattainable in the short term.
As for the future, it is as opaque as ever. While Ebola – as important as it is – may turn out to be a short term economic concern, Europe remains a worry. We need to concentrate on the other side of the Channel for a while.
You may also want to watch:
: : Brian Tora is an associate with investment manager J M Finn & Co in Ipswich.
- 1 Ed Sheeran to be Ipswich Town shirt sponsor for 2021/22
- 2 Driver convicted of killing friend in A12 crash
- 3 Teaching assistant wins unfair dismissal claim
- 4 Woodbridge nurse plans Caribbean retirement after National Lottery win
- 5 Election 2021: Suffolk County Council candidates published
- 6 First views of £1.5m new seafront cafe as hoardings removed
- 7 'It could have been a lot worse' - Thatched home owner thanks crews after fire
- 8 Woman in hospital after fire at Ipswich house
- 9 'Complete shock' - Neighbours stunned after cannabis farm uncovered
- 10 'This bloke is the new sponsor of Ipswich Town' - Ed Sheeran posts throwback picture after shirt announcement