Back in London, the FTSE 100 continues to rally. It’s now up 71 points or 0.87% at 8252 points, more than recovering all of Friday’s drop. That’s despite analysts at UBS downgrading their view on UK shares to Neutral from Most Preferred. In a research note this morning, UBS says there are several reasons to be positive about UK equities – including the return of political stability, last month’s interest rate cut by the Bank of England, and a likely return to earnings growth this year.
Another advantage – UK stocks still suffer from “undemanding valuations”, with shares trading at a lower price/earnings ratio than the long-running average. So what’s the problem? UBS analyst Dean Turner reckons these positive developments seem to be “largely priced in”, adding: ….