A massively volatile market, with tremendous daily movements, leaves even the professionals treading very carefully.

Which way to jump?

Because of the Eurozone’s political impasse in addressing the seemingly unending debt crisis, the equity markets reacted violently to every nuance of politic speak.

FTSE100

Here in the UK an exceptionally volatile FTSE100 managed to gain 9% in the month of October, but it was a hectic ride for those brave enough to play, with the index having lurched between intra-day (daily movement) gains of 2.98% on October 28^th to intra-day losses of 2.97% on the last day of the trading month. A swing of just short of 6%.

Up until the last day of the month the global equity markets were looking robust, but Greece’s decision late on Monday, October 31^st to hold a referendum on the Eurozone's rescue plans caused the positive sentiment to evaporate, literally overnight.

Healthy daily volumes

Surprisingly, given this volatility, daily volumes in the FTSE100 remained at a healthy level with an average of 845,000 trades, peaking at 1,454,233 trades on October 27^th the night of the Eurozone summit.

With the political (and economic) vacuum relating to the Eurozone debt crisis creating negative investor reactions in the early part of the month the final political consensus, agreed after a marathon all-night summit, calmed those nerves considerably towards the latter part of the month, only for that sentiment to swing down dramatically on the last day of the month. However, the index still managed to recover no less than 469 points overall from the previous month’s closing figures.

Long-term trends

Long-term trends in the FTSE100 therefore improved to sit 14.27% below that trend, which represents a substantial improvement from the 20.67% shortfall reported last month.

Global markets report

Other major markets followed this European trend with the Dow Jones closing the month 9.5% up at 11,955 whilst the Eurostoxx50 reflected a 9% gain to 2,385 and the Nikkei225 recording a more modest gain on the month of 3% at 8,988.

Overall then, global markets recovered from the malaise of the previous month, but the Eurozone debt crisis still hangs like a sword of Damocles over both the equity and bond markets.

Commodities

On the commodities front, Oil remained stable with the Brent Crude 1-month Future price of $109.91 up a marginal 6% on the month.

Gold, having hit the dizzy heights of $1,921 in September, remained on the sidelines with the precious metal finishing the month considerably lower at $1,709 representing an 11% fall from its all-time high.

Global currencies

Currencies continued to follow the fundamentals with sterling sitting at $1.60 against the greenback, and €1.14 against the Euro. The Euro itself finished the month at $1.39   against the US Dollar. Thanks to the (very short-term) improved political sentiment in the Eurozone, this represents a 3% gain in the €/$ rate over the month.

It is important to take professional advice before making any decision relating to your personal finances.

NOTHING CONTAINED IN THE ARTICLE SHOULD BE CONSIDERED AS GIVING INDIVIDUAL FINANCIAL ADVICE. THE VALUE OF INVESTMENTS IS NOT GUARANTEED AND WILL FLUCTUATE. YOU MAY GET BACK LESS THAN YOU INVEST. PLEASE NOTE THAT THERE MAY BE VARIATIONS FOR THOSE LIVING IN SCOTLAND AND NORTHERN IRELAND.