Turbulent week ends on high in London
A turbulent week on the London market ended on a high note today after sharp gains for insurance stocks.
The sector, rocked by its exposure to the WorldCom scandal, has been told that rules covering how much money life insurers need to set aside to meet liabilities are being relaxed.
That sent insurers racing ahead, while a tentatively positive start on Wall Street added to the stronger sentiment.
Most analysts had been expecting the US markets to open lower, but by London’s close the Dow Jones Industrial Average and tech-laden Nasdaq were both pulling ahead.
It meant the FTSE 100 Index was able to close up 115.8 points at 4656.4, well above Wednesday’s lows when the latest corporate scandal rocked global equity markets.
But despite a positive end to a week that most investors will want to forget, few believed either US or UK gains were sustainable.
Market watchers warned it did not signal a revival in confidence, especially as some traders had been attempting to "dress up" books prior to the end of the half year.
Tom Hougaard, chief market strategist at City Index, said: "If we see a follow through on Monday I will be a lot happier. It’s the end of the quarter and a lot of people were brushing up their books."
Mr Hougaard said he was "sceptical but mildly optimistic" that today’s gains would be carried forward over the weekend.
But he warned: "We’re still in a bear market and that’s likely to continue for some time."
For today at least, however, a number of stocks were recovering lost ground.
