FTSE 100 ends a winning streak
The FTSE 100 today fell just under 40 points ending a five-game winning streak which has seen the index push above the level last seen prior to the Lehman Bros collapse. Mining stocks and banking stocks were the main losers today pulling the market down despite a number of sectors remaining fairly buoyant. It will be interesting to see how the markets react to a reduced trading period tomorrow because many traders will already have left for the New Year.
As we have covered on numerous occasions, many investors appear to be seeing the signs of "blue sky" recovery in the UK economy while others are concerned. However, again it is worth pointing out that the stock market is rumoured to look ahead by nine months so in effect stocks are being valued on expectations for the economy next September. Whether this is actually correct or not is a matter which has been discussed at great length over the years but many people do believe that the market looks ahead and values shares on future expectations.
Next week will see a flurry of recommendations for 2010 which will no doubt see a number of share price spikes and investors chasing popular companies. Whether it is sensible to chase these stocks in the early days is a matter for individuals although you should take professional advice where applicable.
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