So are equities beginning to look cheap?


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The Independent Online

No sector has been immune from the savage sell-offs on the FTSE 100 of recent days. Supermarkets, miners, drug companies – every company has been caught in the crossfire as screens across City's dealing rooms angrily flashed red.

So, is it time to make the most of the weakness and pick up some stocks on the cheap? A senior trader at one of London's best-known brokerages says he thinks there are "definitely some great buying opportunities" but warns that many investors remained too nervous to wade in these tumultuous times.

"There is definitely money looking for ideas, but no one is massively pushing the buy button yet," he argues, noting that at times in recent days the mood has resembled that seen during the dark days of September 2008, when Lehman Brothers went to the wall.

The sense of uncertainty is also highlighted by Monument Securities economist Stephen Lewis.

"There are no clear yardsticks of value anymore," Mr Lewis says. "That's one of the things troubling investors with the downgrading of what they regarded as unimpeachable AAA debt," he explains, referring to the US losing its top-notch credit rating.

BGC Partners analyst Louise Cooper adds that equities across Europe are looking cheap, with the price to earnings multiple on the FTSE 100 and leading continental markets falling to single digits, "but who has the balls to buy?" she asks.

"The bears and the (few and short term) bulls are currently battling it out for control of the market," she said. "The bears are still in charge."