UK stock market powers ahead again
The FTSE 100 has today powered ahead by nearly 100 points with more and more investors becoming optimistic about the worldwide economy and the potential uplift in the UK economy. As we have mentioned over the last few days, the UK economy seems to be out of sync with many worldwide economies such as America and European counterparts, but many investors believe this is just a short-term blip.
There is no doubt that positive news on the unemployment front, where figures were nowhere near as bad as forecast, have been well received by investors, there are concerns that we are taking one step forward and two steps back. The UK banking industry is still very much under pressure and liquidity in the market place has barely changed over the last few months. In a chicken and egg situation, the UK banks appear unwilling or unable to increase liquidity while the risk of economic downturn remains for 2010.
Some analysts are concerned that investors are looking too far ahead and ignoring the potential short-term pitfalls which could bring the market back down to earth. Many investors have made significant gains over the short term and may well be tempted to take profits at the first sign of trouble?
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