Is the TSE Entering a Bull Market?

Over the last four weeks, the FTSE 100 has recovered by 4.5 percent, and if it were to continue at this growth rate for another 11 months, we would see a total increase of 70 percent. Of course, this is an exceedingly unlikely scenario - but it does show how extreme the shift in sentiment for the index has been over the last few weeks.

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shareprices.com - Tuesday, October 20, 2015

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The question on the minds of every investor is, can the index continue with its upward trend - even if the curve was to flatten out a little.

The FTSE 100 is an index that covers a lot of industries, and has exposure to a lot of different parts of the global economy. This means that it is exposed to a lot of risks, as well as many opportunities. The bulls do have a lot to look forward to, as there is the gradual improvement in the outlook of the US and European economy. The US is posting excellent data in terms of consumer goods, GDP and jobs, but this is a major reason why the Fed is considering an interest rate rise.

Europe is going from strength to strength, and quantitative easing is something that is being discussed, which would improve the GDP outlook for the Euro-Zone. The UK’s economy is also getting stronger, and the Bank of England is committed to keeping interest rates low. All of this points towards a scenario where the FTSE 100 can continue to gain. Unfortunately, the struggles in China are weighing the index down so the long term outlook is more likely to be a muted recovery over the next few months.

 

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