Despite an early wobble, the FTSE has recovered its poise, moving higher for yet another day. This is due to a combination of factors, including optimism about US rates, expectations that Mario Draghi will deliver the goods later and an outbreak of positivity from brokers regarding stock valuations.
The first of these perhaps has the greatest validity, given that the environment remains little changed since the last Fed meeting, and while US central bankers continue to talk about rate hikes, it seems unlikely that anyone will do anything so rash as to actually vote for one. The second is more difficult to forecast, since the ECB is as yet unwilling to expand a QE programme that has not fully proved its worth. The final element underlines a point that has remained constant over the past six weeks; equities look much better value than they did in mid-August, and even if economic growth is weaker than expected the overall outlook remains compelling for the asset class.
With oil rallying today it is hardly surprising to see major oil stocks extend their bounce into a second session. So long as Syria remains a flashpoint in international affairs we are likely to see a constant bid under the oil price.
The 3% drop in SABMiller shares reflects growing scepticism that this merger may go the way of the Vodafone/Liberty move and end up on the ash-heap of history; what seemed like a done deal a few days ago has now become a lot more uncertain.