The FTSE has made a better fist of it today and is showing strength relative to other major indices. The relatively heavy weighting in energy stocks is pushing the UKs benchmark index higher, with help from resurgent resource stocks such as Antofagasta. Overall though the sun isnt shining on all global equities and the FTSEs gains could easily be erased between now and the close. US markets stumbled out of the gate in the first hour of trading and with the notable exception of the Nasdaq, they have made little progress since. The high tech Semi Conductor sector is performing well and showing signs of leadership as the old economy stumbles in the dark. The Dow Jones opened down on a hotter than expected Consumer Price Index and weekly jobless claims rising more than forecast.

The US housing market is still showing signs of weakness. If anything the problem is accelerating despite numerous calls for a bottom over the last 12 months. Foreclosure activity increased by 55% year on year, with one in every 464 houses in trouble. The nascent UK housing collapse still has some way to go to match the declines of the US market, but we do not think it will be long before the UK market registers equally grim readings. We expect further write downs to come from UK banks as the value of their property related investments fall further.

Contacts:

Dave Evans: 0208 977 8381/ Dave@regentmarkets.com
Michael Wright: 00 356 21316105 / michael@regentmarkets.com

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