Two weeks ago I was remarking on the reversal of fortunes for stock markets, which had been unsettled by doubts over whether the US Federal Reserve Bank would continue with its policy of monetary easing.

These concerns remain, and shares have handed back much of the gains made so far this year. It all serves to remind investors that markets do not travel in a straight line.

As it happens, shares in the UK and European markets did stage something of a recovery as the week commenced. This was despite a weak Wall Street last Friday as indifferent economic news emerged, including a downgrade from the IMF for the growth likely to be achieved in America this year. If anything, such developments seem more likely to encourage the Fed to maintain stimulus, but markets accept it cannot continue indefinitely.

There will not be a great deal for investors to get their teeth into this week. Company news is thin on the ground, though a wide diversity of companies will be reporting, including Whitbread, Dixons, Go Ahead and Berkeley.

Perhaps this last company will confirm the better news that is coming out from the house building sector, which does appear to be recovering, helped by government initiatives. Right Move has recently posted a further rise in house prices, which should be good for consumer confidence.

While the top story as the week gets underway must be the G8 summit in Belfast, it is hard to see anything coming out from this gathering of the world’s most powerful leaders that will push markets in either direction.

The report of the Banking Commission, on the other hand, may well stimulate interest. It is believed that the Chancellor might be encouraged to start selling off some of the Government’s stakes in the partially privatised banks. However, with uncertainty over the financial sector continuing, potential buyers may lack enthusiasm.

: : Brian Tora is an associate with investment managers JM Finn & Co.