For the first time in the best part of a month the FTSE 100, the nation’s top blue chip index, finished with confidence in positive territory up nearly 1.5%.
The rise was backed up by a previous day increase of 3% when the index closed at 5320.03, the FTSE 250 also rose by just under 3% to finishing at 10432.05. Both index’s showing confidence after the chaos surrounding the economies, and according to the FTSE group the FTSE 100 added £41.8bn to the value of the UK’s top companies.
There were many positives to take from the recent past, the rise in world stock markets has come after a week of massive fluctuations. The FTSE 100, the UK’s leading index, witnessed swings of nearly 10 per cent during trading hours early in the week and a decline of nearly 10 per cent in the preceding week.
Banking shares in London also did well after a bullish note was published by French bank Societe Generale on the UK’s banks sector.
News was also promising in European markets with France’s CAC 40 rising by just under 5 per cent and Spain’s Ibex 35 showing gains of 4.8 per cent.
Ban does not address the underlying problem
It looks as if the 15-day ban on short selling of stocks in France, Italy, Spain and Belgium have had the desired effect. Dealers had said that the ban had forced traders to protect their short positions by purchasing shares. Thus the demand for shares look to have provided the markets with demand for shares which means that prices will rise, and it has also provided the market an opportunity to gain control over itself. However there is a worry that the bank has not solved the underlying problem.
Michael Hewson, market analyst at CMC Markets said on the topic of the ban: “In the longer term they don’t address the underlying problems.”
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