Behind the Footsie's shocking defending

Article Abstract:

United Kingdom equities have had a difficult summer in 1999 though they were seen as safer than US equities. The FTSE 100 index was seen as likely to be less vulnerable than Wall Street since it had underperformed. There are fears of changes in the UK economy, such as higher interest rates, which have hit UK stocks. Some high-profile stocks have also been affected by disappointments relating to earnings. Stocks cannot by judged by one measure alone, and different components of stock price changes should be assessed.

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An outperformer

Article Abstract:

United Kingdom equities could perform better than those in mainland Europe, according to Goldman Sachs. United Kingdom stocks are cheaper than those in mainland Europe and faster earnings growth may offset higher interest rates. Pound sterling could drop in value in 1998 and may be the only European currency to do so. The UK could also join European monetary union, which would push down interest rates. UK stocks also tend to perform better than thoseof mainland Europe when the latter are weak.

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Drawing a line through uncharted waters

Article Abstract:

Peaks in the UK stock market can be observed through charts using the daily advance line method. This method uses momentum indicators such as advance/decline lines. A daily advance line rising over 21% is a warning indicator, which has often heralded a stock market peak. Warnings of peaks may come early, as happened in Nov 1986, 11 months prior to the fall in prices in Oct 1987. Other warnings have come closer to the peaks, with falls occurring shortly afterwards.

Analysis, Securities industry

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