Tuesday 22nd January 2008
UK investors were left black and blue by yesterdays stock market performance, as January 21st lived up to predictions that it would be the gloomiest day of the year.
Called Blue Monday ahead of time, the FTSE 100s performance on the day led some commentators to suggest that Black Monday would be a better label, with £77 billion wiped off the value of the nations biggest companies.
While London prices dropped by more than five per cent over the course of the day, the US markets remained closed for national holiday Martin Luther King Day.
There was little comfort to be had from the publication of statistics prepared ahead of time, which served to confirm the obstacles faced by the economy at the moment.
Figures from the Office for National Statistics show that the public sector borrowed some £43.6 billion in the year to December 2007, an £11 billion increase over 2006.
Shadow chief secretary to the Treasury Philip Hammond commented: "This huge Christmas credit card bill for the government will be a further blow to Alistair Darling on Blue Monday, reportedly the most depressing day of the year."
But Paul Niven, head of asset allocation at F&C Investments, observes that the situation could leave investors rubbing their hands with glee.
"We expect recent moves to provide a buying opportunity for bold investors who have the ability to tolerate short-term volatility," he contends.
He adds that the analysts "risk appetite indicators" are lodged firmly within "panic territory" - strengthening the likelihood that the stock market will recover in the coming months.
However, Mr Niven warns prospective investors that relying on short-term volatility in order to profit is a risky strategy and can backfire.
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