The risk with any sudden surge in the stock market amid headwinds such as rising inflation and higher interest rates is that it is a short-lived event
Russ Mould, investment director at AJ Bell, said: โItโs common to see a bear market rally when stocks are down, but they often cannot be sustained. To see many stocks and shares move higher for the second week in a row is encouraging but itโs too early to declare this a bona fide recovery rally.
โThere are still factors that could change investor sentiment from optimism to pessimism such as if the next inflation figures are worse than expected, and the UK governmentโs Autumn Statement contains some tough measures to get its finances under control.
โThe FTSE 100 advanced 0.4% to 7,350 while the Hang Seng jumped another 1.7%. Among UK mid-caps, the FTSE 250 dipped 0.3% to 19,567. After seeing investors pile into more risky stocks last week, today was a day for more defensive names, with tobacco, consumer goods and pharmaceutical companies in vogue.
โNews that Joules is going into administration put the chills up the back of investors holding retail stocks as they wonder who might be next to issue bad news on trading. ASOS fell 3.4% and Quiz dipped 1.6%.โ
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