London Market: Stocks on a rollercoaster

UK STOCKS are expected to be mixed this week as US stocks extend losses because of concern about a global economic slowdown, offsetting prospects of buying by investors who think prices have fallen too far. Bonds are expected to rise, as concern about the Russian debt default attracts investors to fixed-income securities.

Stocks are likely to see big rises and falls, "and you don't know where it's going to be at the end of the week", said Tim Gregory, a fund manager at Gartmore Capital Management.

On Wednesday, Thursday and Friday, the benchmark FT-SE 100 stock index suffered its worst three-day slide since 1987, down 7.1 per cent. Over the week as a whole, the index fell 4.16 per cent, ending 119.10 points lower, at 5,249.4.

Stock markets around the world slumped as Russia's sliding currency and debt default spurred concern that the turmoil will spread to other emerging markets, hobbling the outlook for corporate profits worldwide.

"The volatility we are seeing is quite astonishing," Mr Gregory said. "There is definitely some good value being offered by some quality UK equities."

Investors will look to Russia for evidence that the Government is moving to shore up its slumping economy. "We're going to be totally dominated by external forces," Mr Gregory said.

Eyes will be on engineering companies, as Senior Engineering Group, Meggitt and Amec all release first-half earnings on Thursday. The companies are likely to show that manufacturing is suffering from slowing global demand and the strong pound. The pound has gained 2.5 per cent against currencies of its major trading partners in the past eight days.

Bonds are likely to be supported by "the ongoing problems in Russia and the prospect of other emerging markets following suit", said Andrew Snowball, an economist at Julius Baer Investments.

Gilts lost early gains on Friday because "valuations looked a little bit stretched" at record low yields, said John Kelly, an investment director at Barclays Global Investors Funds. Even so, "the underlying safe-haven theme won't change soon".

The benchmark 7.25 per cent, 10-year UK government bond pared gains of as much as 29/32, or 91 pence per 100-pound bond, ending 6/32 higher at 114 3/32. At one point, the yield touched 5.21 percent, its lowest in more than 30 years.

Start your day with The Independent, sign up for daily news emails
News
One Direction's Zayn Malik gazes at a bouquet of flowers in the 'Night Changes' music video
people
News
people
News
'Free the Nipple' film screening after party with We Are The XX, New York, America - 04 Feb 2014
news
Arts and Entertainment
Russell Tovey, Myanna Buring and Julian Rhind Tutt star in Banished
tvReview: The latest episode was a smidgen less depressing... but it’s hardly a bonza beach party
ebooks
ebooksA special investigation by Andy McSmith
  • Get to the point
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs Money & Business

Recruitment Genius: Claims Administrator

£16000 - £18000 per annum: Recruitment Genius: A position has arisen within th...

Ashdown Group: Development Manager - Rickmansworth - £55k +15% bonus

£50000 - £63000 per annum + excellent benefits : Ashdown Group: IT Manager / D...

Recruitment Genius: Security Officer

£16500 per annum: Recruitment Genius: Applicants must hold a valid SIA Door Su...

Ashdown Group: Business Analyst - City, London

£50000 per annum: Ashdown Group: Business Analyst - Financial Services - The C...

Day In a Page

The saffron censorship that governs India: Why national pride and religious sentiment trump freedom of expression

The saffron censorship that governs India

Zareer Masani reveals why national pride and religious sentiment trump freedom of expression
Prince Charles' 'black spider' letters to be published 'within weeks'

Prince Charles' 'black spider' letters to be published 'within weeks'

Supreme Court rules Dominic Grieve's ministerial veto was invalid
Distressed Zayn Malik fans are cutting themselves - how did fandom get so dark?

How did fandom get so dark?

Grief over Zayn Malik's exit from One Direction seemed amusing until stories of mass 'cutting' emerged. Experts tell Gillian Orr the distress is real, and the girls need support
The galaxy collisions that shed light on unseen parallel Universe

The cosmic collisions that have shed light on unseen parallel Universe

Dark matter study gives scientists insight into mystery of space
The Swedes are adding a gender-neutral pronoun to their dictionary

Swedes introduce gender-neutral pronoun

Why, asks Simon Usborne, must English still struggle awkwardly with the likes of 's/he' and 'they'?
Disney's mega money-making formula: 'Human' remakes of cartoon classics are part of a lucrative, long-term creative plan

Disney's mega money-making formula

'Human' remakes of cartoon classics are part of a lucrative, long-term creative plan
Easter 2015: 14 best decorations

14 best Easter decorations

Get into the Easter spirit with our pick of accessories, ornaments and tableware
Paul Scholes column: Gareth Bale would be a perfect fit at Manchester United and could turn them into serious title contenders next season

Paul Scholes column

Gareth Bale would be a perfect fit at Manchester United and could turn them into serious title contenders next season
Inside the Kansas greenhouses where Monsanto is 'playing God' with the future of the planet

The future of GM

The greenhouses where Monsanto 'plays God' with the future of the planet
Britain's mild winters could be numbered: why global warming is leaving UK chillier

Britain's mild winters could be numbered

Gulf Stream is slowing down faster than ever, scientists say
Government gives £250,000 to Independent appeal

Government gives £250,000 to Independent appeal

Donation brings total raised by Homeless Veterans campaign to at least £1.25m
Oh dear, the most borrowed book at Bank of England library doesn't inspire confidence

The most borrowed book at Bank of England library? Oh dear

The book's fifth edition is used for Edexcel exams
Cowslips vs honeysuckle: The hunt for the UK’s favourite wildflower

Cowslips vs honeysuckle

It's the hunt for UK’s favourite wildflower
Child abuse scandal: Did a botched blackmail attempt by South African intelligence help Cyril Smith escape justice?

Did a botched blackmail attempt help Cyril Smith escape justice?

A fresh twist reveals the Liberal MP was targeted by the notorious South African intelligence agency Boss
Tony Blair joins a strange and exclusive club of political leaders whose careers have been blighted by the Middle East

Blair has joined a strange and exclusive club

A new tomb has just gone up in the Middle East's graveyard of US and British political reputations, says Patrick Cockburn