Broad recovery on global markets

Heading into the close, indices are in positive territory, marking a sharp turnaround from this morning’s open. 

City of London skyline
Source: Bloomberg

Markets in Europe, the UK and the US have spent the day recovering losses, as investors digested the impact of Friday’s events. Most European indices started the day firmly in the red, but since then we have seen these losses disappear, to be replaced with dip-buying.

Across stock markets, travel firms have borne the brunt of the selling, with Carnival, TUI and Intercontinental Hotels all down in London today. Overall the economic backdrop has changed little from the end of last week, when indices took heavy losses, but it seems that once again many had simply been waiting for a sufficiently impressive run of losses to occur before buying once again.

The housebuilding sector as a whole has enjoyed a good afternoon, with investors taking the opportunity to add to the usual names. Taylor Wimpey’s improved margin performance will allay some concerns about the sector’s outlook, after two weeks of declines due to fears that demand growth was poised to slow.

Investors have been attempting to work out what the aftermath of the events in Paris will be. Concerns are rife that tightened border controls will lead to lower economic growth, thus prompting the European Central Bank to boost and/or lengthen its stimulus programme. Expectations of more easing have kept the euro around the key $1.07 mark, with today’s inflation data doing little to hinder the view that the ECB will have to do more to boost the region’s economy. 

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