Cats are featuring a lot in this stock market sell-off. Type cast as the proverbial dead cat bounce, global markets are now showing real signs of life. However our investment cat appears to have stepped onto a hot tin roof as equities are jumping all over the place. Overnight Bombay’s BSE Sensex index rose 8.97% and Hong Kong gained 2.12%. As I write the FTSE 100 is up 1.54% whilst the more domestically focused FTSE 250 has rallied by 4.24%. It is however only when you look at individual stock prices that you see the extent of the extraordinary price movements. AJ Bell Youinvest, a direct to consumer platform send out a lunchtime market news e-mail to investors. Today they reported Cineworld was up 35.4% despite shutting all cinemas in 10 countries and suspending its dividend. House builder Vistry gained 15.1%. Premier oil rose 18%. Traders are looking at company specifics and identifying buying opportunities in the bear market. There are reasons to buy other than low prices, in some cases this is due to demand created by the pandemic.
The general upward trend of equities in the last few trading days reflects optimism that new coronavirus cases and deaths have fallen in various countries, though not in the UK. None of us are epidemiologists and it is far too early to say how long the economy will remain in lockdown. Expect more ups and downs in markets in the meantime. Volatile share price movements are a trader’s friend although their short termism is not a recipe for sustainable price rises. Tomorrow may be another bad day for markets.
The content of this blog are my own views. It is intended as general investment information only. Nothing in this article should be construed as personal investment advice for example to buy any of the stocks highlighted. You should seek individual advice based on your own financial circumstances before making investment decisions.