Markets upbeat as sentiment improves

STOCK markets ended the week on a slightly up beat note with the FTSE up 1% to 4059.3 for the period.

In the US, the Dow was ahead 1% and closer to home the ISEQ 100 did marginally better gaining 2.4%.

Overall, markets are up by more than 20% since March as sentiment improved once the war on Iraq was out of the way.

But the phenomenal rise has halted to a considerable degree in the past few weeks as concerns persist about the recovery in the US.

One of the key determinants of how markets will progress or regress in the coming months hinges on how second quarter earnings in the US perform as results unfold. To date they have not been encouraging. Various indices have been less than inspiring and much talk now is of a jobless recovery in the US.

Sentiment will have been hurt yesterday by the surprise decision of the new Bank of England governor, Mervyn King, to cut British rates by 0.25%.

oor external demand was blamed for the decision by the bank’s Monetary Policy Committee underpinning the fact that demand across Europe and the US is still weak.

Meanwhile, analysts warn markets will “move sideways” as they await further pointers about earnings from US corporates.

Next week will see that process get going in earnest and if the visibility factor is good, markets could stage a further rally.