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FTSE rocked by market volatility

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The FTSE 100 has declined 9.32% over the last six months, according to research by ADVFN.

The study by the stocks and shares website highlights the extent of the volatility that has been hitting the markets. Having opened the year at 6450.9, the UK’s main index dropped to its lowest level of 5338.7 points on 22 January; a long way from its six month intraday peak of 6751.7 achieved on 15 October 2007. This equates to a 1413-point move – a 21% drop – from the index’s high to its low.

After dropping into 5000 territory on 16 January 16, the index has clawed its way back to a post-6000 position on three occasions: 1 and 26 February and 7 April, but has failed to sustain this level for more than a day.

Despite breaching the psychological 6000 level, the FTSE is down 7.14% since the start of the year and down 9.32% in the last six months. The index’s closing high of 6730.7 for this period occurred on 12 October and its closing low (5414.4) was on 17 March.

Volatility has not been restricted to stocks and indices however. Commodities have also experienced a rollercoaster ride. Gold for example, has seen a 37.2% move in the same period.

Clem Chambers, CEO of ADVFN, said: “There are no two ways about it; we are in a bear market. However, this does not mean that stocks and indices go down in a straight line.

“In markets such as these where the underlying trend is down, strong rallies are commonplace, but the day-to-day weakness overcomes moments of strength overall. Breaking back up through psychological barriers such as 6000 unfortunately does not mean the good times are back. This is bad news for investors but can be profitable for traders.”

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