FTSE 100, funds ‘performance makeup’!?
Brexit panic wiped out $2 trillion in global markets on June 24., the British Pound suffered a huge fall at the lowest level verus the US dollar since 1985, but take a look at the FTSE 100 a few days latter. The FTSE 100 has break through 6,300 few moments ago as stocks continue to rally in the last two days. The blue chip index is now just several points lower of where it closed last Thursday before the Bretain’s vote to leave the EU. As if nothing had happened!?
We could say that the London stock market recovered in total today and it has erased loss in complete on June 29. In the meanwhile, the German DAX is still in huge loss, the S&P 500 as well. What to think after this move? It seams that the main global markets are much more worried about Brexit then Britain itself!? Is this some kind of the celebration or it’s just a proff from London that he is still the Nr.1 in the financial world, despite everything!?
But, there is maybe a reasons behind this move. It’s the end of the second quarter of the year and fund perfomances matters. They can’t afford such a loss at the end of the second quarter and that’s probably the main reason for this move. To calm the investors and to show them as there is no problems in the financial makets. I would call this a ‘preformance makup’. Another reason could be weakening of the British Pound, which is a good thing for the economy and British export companies and their profit and that’s why the stock market could react positive on this development about Brexit. Eaither way, the British stock market is showing it’s strenght for real.