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
Life and Style
love + sex
Voices
A propaganda video shows Isis forces near Tikrit
voicesAdam Walker: The Koran has violent passages, but it also has others that explicitly tells us how to interpret them
News
people
Arts and Entertainment
Victoria Wood, Kayvan Novak, Alexa Chung, Chris Moyles
tvReview: No soggy bottoms, but plenty of other baking disasters on The Great Comic Relief Bake Off
ebooks
ebooksA special investigation by Andy McSmith
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

Ashdown Group: Graduate Application Support Analyst

£25000 - £30000 per annum + benefits: Ashdown Group: A global leader operating...

Reach Volunteering: External Finance Trustee Needed!

Voluntary post, reasonable expenses reimbursed: Reach Volunteering: Would you ...

Christine McCleave: FP&A Analyst

£36,000 - £40,000: Christine McCleave: Are you looking for a new opportunity a...

Recruitment Genius: Sales Executive - OTE £40,000

£15000 - £18000 per annum: Recruitment Genius: This is a great opportunity for...

Day In a Page

War with Isis: Iraq's government fights to win back Tikrit from militants - but then what?

Baghdad fights to win back Tikrit from Isis – but then what?

Patrick Cockburn reports from Kirkuk on a conflict which sectarianism has made intractable
Katarina Johnson-Thompson: Heptathlete ready to jump at first major title

Katarina Johnson-Thompson: Ready to jump at first major title

After her 2014 was ruined by injury, 21-year-old Briton is leading pentathlete going into this week’s European Indoors. Now she intends to turn form into gold
11 best gel eyeliners

Go bold this season: 11 best gel eyeliners

Use an ink pot eyeliner to go bold on the eyes with this season's feline flicked winged liner
Syrian conflict is the world's first 'climate change war', say scientists, but it won't be the last one

Climate change key in Syrian conflict

And it will trigger more war in future
How I outwitted the Gestapo

How I outwitted the Gestapo

My life as a Jew in wartime Berlin
The nation's favourite animal revealed

The nation's favourite animal revealed

Women like cuddly creatures whilst men like creepy-crawlies
Is this the way to get young people to vote?

Getting young people to vote

From #VOTESELFISH to Bite the Ballot
Poldark star Heida Reed: 'I don't think a single bodice gets ripped'

Poldark star Heida Reed

'I don't think a single bodice gets ripped'
The difference between America and Israel? There isn’t one

The difference between America and Israel? There isn’t one

Netanyahu knows he can get away with anything in America, says Robert Fisk
Families clubbing together to build their own affordable accommodation

Do It Yourself approach to securing a new house

Community land trusts marking a new trend for taking the initiative away from developers
Head of WWF UK: We didn’t send Cameron to the Arctic to see green ideas freeze

David Nussbaum: We didn’t send Cameron to the Arctic to see green ideas freeze

The head of WWF UK remains sanguine despite the Government’s failure to live up to its pledges on the environment
Author Kazuo Ishiguro on being inspired by shoot-outs and samurai

Author Kazuo Ishiguro on being inspired by shoot-outs and samurai

Set in a mythologised 5th-century Britain, ‘The Buried Giant’ is a strange beast
With money, corruption and drugs, this monk fears Buddhism in Thailand is a ‘poisoned fruit’

Money, corruption and drugs

The monk who fears Buddhism in Thailand is a ‘poisoned fruit’
America's first slavery museum established at Django Unchained plantation - 150 years after slavery outlawed

150 years after it was outlawed...

... America's first slavery museum is established in Louisiana
Kelly Clarkson: How I snubbed Simon Cowell and become a Grammy-winning superstar

Kelly Clarkson: How I snubbed Simon Cowell and become a Grammy-winning superstar

The first 'American Idol' winner on how she manages to remain her own woman – Jane Austen fascination and all