RESEARCH ALERT-Deutsche cuts FTSE 100 forecast
Monday July 12, 12:55 pm Eastern Time
(Note: this article is ''in progress''; there will likely be an update soon.)
LONDON, July 12 (Reuters) - Deutsche Bank strategists said on
Monday they cut their year-end forecast for Britain's FTSE 100 index to
6,000 from 6,350, reflecting expectations for rising gilt yields.
Deutsche strategists Bob Semple and David McBain -- who recently
joined the bank's research department with the acquisition of BT Alex
Brown -- said global bond yields looked set to rise through coming
months, putting untenable strains on equity markets.
In the UK, the strong cash position of UK funds was also no longer so
positive a factor as it had been in the earlier part of the year, the
strategists said.
Their new FTSE 100 forecast is some way below current levels,
suggesting some downside to come for the UK market. The index was
down 13.9 points at 6,548.7 by 1510 GMT.
Domestic UK price pressures remain subdued but international pressures
are likely to predominate, they argued.
''The world economy is regaining momentum...consequently we expect a
further 75 basis point rise in U.S. rates over the next 12 months,''
strategists said. ''This will shift the whole yield curve upwards, finally
pulling the plug on the equity bull market.'' |
