City bearish despite Footsie milestone

THE FTSE 100 today opened above the 5000 level for the first time since the weekend of the Queen's Golden Jubilee in 2002 but City analysts are questioning whether it will hold on to its recent run of gains for much longer.

A survey of market analysts reveals City soothsayers are more bearish about future share price movements than they have been since the market sank to its most recent low point of 3287 in March 2003.

Financial website DigitalLook.com, which provides This is Money with its financial data feeds, says brokers have downgraded recommendations on almost three times as many stocks as they upgraded in the past two months.

Analysts tend to be more positive than negative on stocks but the ratio of positive to negative recommendations has halved from 6-1 last April to 3-1 today.

DigitalLook director Andy Yates said: 'City scribblers are usually unremittingly positive about companies they back, so it is worrying they have turned more negative. However, they have been wrong in the past and could be wrong again.'

Yates said analysts were increasingly concerned that the recent rally in the stock market could not be sustained, with more negative underlying sentiment about individual companies' prospects.

The Footsie, up 10.4 points today at 5010.4, has risen more than 13% in the past year. The March 2003 nadir represented an eight-year low, the market having fallen from its all-time high of 6930.2 on the last trading day of 1999.

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