Trading volumes in London are far outstripping those seen during the dotcom frenzy, despite share prices still being below their last bull-market peaks. Average monthly turnover in FTSE 100 stocks so far this year has been £187bn, 65% higher those seen in 2000. "Shares are simply being traded more often," explains Tony Tassell in the FT. A greater volume of purchases by hedge funds and other very active investors accounts for up to 50% of market volumes. Increased share buybacks and derivatives-hedging have also contributed. But the presence of many investors with short-term agendas is creating distortions, says fund manager Ed Burke of Invesco Perpetual. This will "present opportunities for investors who take a longer-term perspective".
MoneyWeek
Subscribe to MoneyWeek today and get your first six magazine issues absolutely FREE
Sign up to Money Morning
Don't miss the latest investment and personal finances news, market analysis, plus money-saving tips with our free twice-daily newsletter
Don't miss the latest investment and personal finances news, market analysis, plus money-saving tips with our free twice-daily newsletter
-
Inflation holds steady at 3.8% ahead of BoE meetingThe rate of inflation did not rise in August, but the Bank of England is still expected to keep interest rates on hold tomorrow
-
Thousands of savers with £250k pensions take cash over tax-free money and IHT fearsWith a record £70 billion withdrawn from pensions in the year to March, experts are concerned savers are making knee-jerk decisions without advice that could affect their long term wealth
