Yahoo Finance Santa Rally expected to bring festive joy to London’s FTSE 100 after tough year
Investors are hoping for a so-called Santa Rally to push the FTSE 100 further into the green this year.
London’s flagship index edged into positive territory for 2023 last week, up a couple of points from the start of the year.
The more domestically focused FTSE 250 has also kept its head above water over the course of the year, up just more than 0.3 per cent.
The year has been marked with ongoing concerns over a recession that never arrived, whilst the Bank of England’s regular rate hikes – and the watering down of hopes for cuts next year – have weighed on sentiment.
However, there are signs that London’s embattled equities market could be set for a cheerier 2024. One in four investors are expecting the FTSE 100 to finish next year above 8,000 – some way above its current 7,600 level.
Some four in five of those polled by Interactive Investor are expecting to up their exposure to equities next year, too.
So-called ‘Santa rallies’ see markets perk up towards the end of the year, which often follows into the year after as traders – institutional and retail alike – get caught up in the festive cheer.
Research by Shore Capital showed that around 75 per cent of December to February periods since the 1980s have seen significant upward movement on London’s main exchanges.
Robert Sanders, a research equity analyst at the firm, said traders may receive more of a Christmas present than expected next year if they pick up “absolutely and relatively undervalued UK equities” under the tree.
