Market Commentary November 2013

Since our last market commentary, in which we moved to equalweight from overweight on equities, the FTSE 100 has fallen 117 points (1.73%).

After reaching multi-year highs, the equity market was simply looked tired. Indeed, various indicators at the beginning of the month predicted this – the bull/bear ratio, director selling, and the gap between sector risk appetite and overall risk appetite had all reached extreme levels associated with marginal market falls.

Last month’s stock recommendations were disappointing with Centrica falling 4.2% and HSBC falling 0.3%. We are still bullish on both, which yield 5.3% and 4.6% respectively. On top of this, Deutsche Bank has since put a 430p price target on Centrica (26% potential upside) and Nomura has since placed a 850p price target on HSBC (24% potential upside).