Trends indicate FTSE 100 correction

The economic viewpoint will each week take a look at major market trends, from interest rate moves to increased M&A activity in Europe, talking with strategists from the major UK investment houses on their macro view of markets.

The equity market is due for a modest correction in the next three to six months based on historical trends, New Star strategist Simon Ward has claimed. Ward has calculated the average movements in the past three bear markets, 1929-1932, 1936-1940 and 1972 to 1974, to identify trends following the market peak in 2000. The economist, who started this process in mid 2002, noted the UK equity market since the March 2000 peak has roughly followed the same pattern as the average of the past three bear markets and now looks to be moving ahead, indicating a likely correction. While noting it is ...