Are we set for Santa rally after central bank action?

Global stock markets rallied hard yesterday on news of co-ordinated action by major central banks to improve liquidity, but analysts are divided over whether it will lift markets further in December.

So called 'Santa rallies' have seen UK blue chip shares rise in December for the last eight years in a row. Analysts suggested the co-ordinated action, extending the existing swap lines for banks borrowing dollars as well as lowering the cost of using such lines, could at least support sentiment until the next eurozone summit on 9 December. That would be in keeping - at least in part - with recent years that have seen particularly strong December gains in light of central bank action, most notably the 6.8% rise in the FTSE 100 posted in December 2010. This came as the Federal Reserve ...