Momentum-driven market requires more consensus earnings reductions

The performance of the UK equity market has been unpredictable over the past few months, with a sust...

The performance of the UK equity market has been unpredictable over the past few months, with a sustained 10-week rally following the worst start to a year since the early 1900s. The common element throughout all of this volatility, however, is that this remains a powerful momentum-driven market. This is clearly illustrated, in our opinion, by the continued interest in the highly valued, low-yielding mining sector, while the companies that we favour - undervalued, good quality income stocks like BT, Vodafone and Royal & Sun Alliance - have continued to underperform. The question as to whe...