Equity markets on the up with firm newsflow restoring confidence

As 2009 has progressed, I have become increasingly confident about the positive direction of European equity markets.

I turned positive in February when I increased my weighting in cyclical and financial stocks, following the start of an improving trend in economic leading indicators and the willingness of governments to provide economic stimulus. The mood of the market reached a bearish crescendo after many quarters of disappointment and this was reflected in the high cash levels and defensive sector biases in many European equity funds. My experience of previous economic cycles is that around half of overall market gains are made before the leading economic indicators reach positive territory. It is t...