Prudential cuts Footsie forecast

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The Independent Online
PRUDENTIAL Corporation, which manages pounds 50bn of investments, has reduced its forecast for the level of the stock market at the year-end to 2,650 for the FT- SE 100 index - just 6.7 per cent above last night's close of 2,483.4, writes Clare Dobie.

Hugh Jenkins, chief executive of Prudential Portfolio Managers, said the cut reflected the delay to expected economic recovery. In the spring Prudential, which owns almost 4 per cent of the stock market, had expected the FT-SE 100 to end at 2,750.

The Prudential's clout means that its decision is likely to prompt other investors and stockbrokers to revise their estimates.

The consensus among brokers is for the FT-SE 100 to reach about 2,800 at the year-end. Some have not cut their forecast since the start of the year.

Prudential's 2,650 forecast compares with the record high reached in May of 2,738 and this year's low of 2,383.

As well as managing money invested on behalf of the Prudential insurance policy holders, Prudential Portfolio Managers invests pension funds for third parties.