Festive mood?

Whether or not it constitutes another so-called Santa Rally remains to be seen, but after the previous week's disappointment the UK equity market enjoyed its best week for three years. Earlier in the week investors took fright at yet another plunge in the price of oil. Weak US manufacturing data and nervousness that the Greek presidential election could trigger a flare-up of the eurozone crisis added to the gloom that was mirrored in markets around the world.

The catalyst for the turnaround was Wednesday's Open Market Committee statement from the US Federal Reserve, in which it said it would be "patient" on the timing of interest rate increases. Investors interpreted this as a sign that rates would not rise as quickly as expected, sparking a relief rally and demonstrating again the Fed's power to shift sentiment.

This week's bulletin also includes:

  • Russia's woes deepen although the rouble rallies at the end of the week.
  • UK inflation hits a 12-year low to provide some cheer for consumers.
  • Changes to the taxation of inherited ISAs find favour with older investors.

View this week's Market Bulletin , which contains thoughts and opinions of St. James's Place and our range of investment managers on the key issues affecting investors.

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