Stock Markets Review For 1995

The UK's FT-SE 100 index started 1995 at 3,066 and finished the year at 3,689.3, up 20.3%, more or less in line with the expectations of UK market observers, and considered to be a good performance. Interest rates came down quicker than some expected during the year and the bond markets were stronger than anticipated. In the USA, the Dow Jones Industrial was up 33.5% to 5,117.12 by year-end from 3,833 in January, and in Japan, the Nikkei stood at 19,723 at the start of the year, finishing at 19,868.15, a rise of just 0.7%.

Looking at the markets from an historical perspective, David Schwartz, stock market historian and editor of the Schwartz Stock Market Handbook, commented in the Financial Times that history shows that London and Wall Street both rise consistently in the year preceding a US presidential election, which appears to have been the case in 1995.

Forecasts for the current year range between the current level and 4,200 for the Footsie, the current level and 6,000 for the Dow, and up to 22,000 for the Nikkei. Mr Schwartz suggests that London will see a correction following the 1995 rises, and he does not expect the Footsie to be any higher than the current 3,700 by the end of the year.