FTSE reluctant to get carried away

The FTSE continues to lag behind all of its major European counterparts as we head towards the final month of the year.

Now that we are two weeks into November, seasoned traders will be conscious that a Christmas rally could well be around the corner. A Christmas rally is a creature just as mythical as jolly Santa Claus, but rather less reliable – regardless of how well-behaved you have been over the rest of the year.

A quick glance over the performance of the FTSE 100 year-to-date shows that the index is up 13.37%. At numerous times in 2013 traders would have been only too happy to have seen that. However, when compared to some of our European counterparts now, it begins to look a little disappointing.

The German DAX is currently up 23.94% – an impressive return, especially when you consider the wobbles that Germany’s export-driven economy has had to suffer. Both external demands in Asia, as it went through a rough patch earlier in the year, and the volatility of the euro have combined to take the shine off exports.

The French CAC has also left the FTSE in the shade, with returns of 21.35% over 2013. French President Francois Hollande is now officially the most unpopular ruling president in the last 60 years, and has overseen a change in the French tax system that has left many in disbelief and the rich heading for the border.

Could we see the FTSE catch up and deliver returns in excess of 20%? That seems a touch optimistic. More realistically, perhaps a closing of the gap might be in order.

IGA, may distribute information/research produced by its respective foreign marketing partners within the IG Group of companies pursuant to an arrangement under Regulation 32C of the Financial Advisers Regulations. Where the research is distributed in Singapore to a person who is not an Accredited Investor, Expert Investor or an Institutional Investor, IGA accepts legal responsibility for the contents of the report to such persons only to the extent required by law. Singapore recipients should contact IGA at 6390 5118 for matters arising from, or in connection with the information distributed.

This information/research prepared by IGA or IGA Group is intended for general circulation. It does not take into account the specific investment objectives, financial situation or particular needs of any particular person. You should take into account your specific investment objectives, financial situation or particular needs before making a commitment to trade, including seeking advice from an independent financial adviser regarding the suitability of the investment, under a separate engagement, as you deem fit. No representation or warranty is given as to the accuracy or completeness of this information. Consequently any person acting on it does so entirely at their own risk. In addition to the disclaimer above, the information does not contain a record of our trading prices, or an offer of, or solicitation for, a transaction in any financial instrument. Any views and opinions expressed may be changed without an update.

See important Research Disclaimer.