Investors who have been watching the FTSE100 Index, also known as the London Stock Exchange, very closely over the past few months have been closely watching its tendency to follow the Global Economic Recession with almost an undetermined hesitancy. With the global financial meltdown hitting its full stride over the course of the past two-and-a-half years, coupled with the worsening state of the economies in Europe and the United States, the index has seemingly buckled under the pressure, taking some investors by surprise. The index has maintained its recent high levels, despite growing worries about a possible recession, for the past three months. This follows closely on the heels of mounting inflation worries, which have also affected the markets worldwide, and have pushed up the FTSE100’s cost even further.
However, with market analysts anticipating that the inflationary pressures would only last only for the second half of this year, and that the global economy will pick up from its recent dismal pace, more investors are starting to view the FTSE100 in a different way. Rather than viewing it as a negative sign for the market, many believe that it is an appropriate measure of the health of the British stock market, as the index reflects the overall performance of the country’s financial industry, which is virtually immune to any turbulence caused by current political issues. These include concerns over the sustainability of the global economic recovery, which has so far proved problematic in the United Kingdom, and concerns over the housing market, which has taken a hit recently owing to high house price inflation across the country. While many analysts believe that these factors have largely affected the FTSE100, others point to signs of strength within the company. In particular, the fact that British Petroleum (BP) has continued to defy the odds and maintain its hold on the world’s largest oil reserve is being widely credited for the current bullish nature of the FTSE100.
A key indicator of market health is the performance of the main equity index. In recent weeks, following news that the oil major was considering filing for bankruptcy, the FTSE100 became noticeably weaker, dropping by over a hundred points in a matter of hours. This sudden drop in the market resulted in sharp increases in the prices of oil stocks, petroleum materials and other assets, with the index soon edging out the share of the blue-chips and gold. With fears of an impending recession growing in the wake of further indicators that economic growth will be slowing in the UK, the FTSE100 looks set to continue its relentless upward trend.
Should the current trend continue, analysts predict that the FTSE100 will continue to climb higher in the coming months. Even amidst increasing indicators of weakening global economy, the FTSE100 is expected to continue its upward momentum, thanks to the benefits it receives from an array of global trading markets. This includes the large-scale London Stock Exchange (LSE), European markets and New York Stock Exchange (NYSE). The London Stock Exchange trades shares in shares of oil companies from all over the world, whereas the NYSE trades shares in stocks of oil companies listed in New York. Both these markets typically allow investors to gain access to company information, company news, and financial information pertaining to oil production and sales. The latter allows investors to closely monitor the oil production and price movements, which are important factors in determining the future price of oil stocks.
With this said, the FTSE100 has continued its upward trend, with many analysts predicting that it will continue to do so in the coming months. While the index itself has dropped by around thirty points over the last twenty-four hours, these downward trends are expected to last only a matter of days. In addition, market participants have also been quick to recognize the positive effects the oil stocks are currently experiencing. With this in mind, the FTSE100 is widely expected to make a continued upward trend in the coming months and years.
However, investors must keep in mind that the FTSE100 is only one of the many stock markets out there, which can provide investors with similar investment opportunities. For example, in addition to the NYSE and London Stock Exchange, there are also other major exchanges such as NASDAQ and the Australian Securities Exchange. It is best for new investors to compare prices and volumes among the various stock markets before deciding on which one to invest in. By doing this, you will be able to better understand inflation rise concerns, oil production and price movements, and other important topics related to investing in the oil industry.