F&C Investments predicts equity market recovery

Tue, 20 Mar 2007

An industry specialist has moved to reassure people with equity investments that global stock markets are recovering after the recent difficulties.

On February 27th 2007, the composite index of the Shanghai Stock Exchange dropped 8.8 per cent - its largest fall in ten years.

The move sparked a fall in the value of investments across the globe, with the FTSE 100 and the Dow Jones industrial average both adversely affected on the day.

More recently, however, Paul Niven, head of asset allocation at F&C Investments, has noticed "greater stability in prices and some tentative upward momentum being re-established".

As a result, he has suggested that the fluctuations were an example of a correction to bullish stock markets and indicative of the fact that short-term volatility is high.

Yet they do not point towards sustained decline, he argued.

"The fundamental backdrop remains supportive and, in the absence of fundamental change, we continue to view further material weakness as a buying opportunity," he explained.

Last month, financial services provider Capital claimed that private investors saw their investments rise in value by approximately £5 billion in the final month of 2006 and the first month of 2007.

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