Today, companies on Wall Street and the FTSE 100 recovered following a week of huge losses after the turmoil of the global stock market.
Yesterday, the blue-chip companies of London gained nearly 1.2 percent, just falling short of the 7,200 points mark.
The US benchmark, the S&P 500, increased by 1.4 percent as, while Nasdaq, a tech-focused company experienced a gain of over 1.5 percent.
The said gains have had the investors pondering if the big sell-off from last week, which observed a peak-to-trough decline on the FTSE 100 a little shy of the correction territory of 10 percent, is the beginning for a healthy readjustment or a broader bear market.
The investment strategist at European Wealth Group, Richard Stammers, said that he anticipates the “short term to remain bumpy – possibly very bumpy.”
“For every short-term bounce there could be an equal and opposite slide back,” said Stammers, with a 15 percent decline from the peak not impossible.
However, he added that the recent sell-off represents a “buying opportunity,” with strong economic fundamentals across the major developed economies.
That confidence has been reflected by central bankers. Last week, the governor of the Bank of England said that it was a healthy thing for equity markets to be able to recover following a period of unusual calm.
Concerns regarding a serious challenge to stability were also limited due to the relatively confined nature of the sell-off: while increasing bond yields in the midst of higher inflation were part of the trigger for the decline of the stock market, currency markets continued to be slightly affected.
However, the near term could still be painful once investors pile back into stocks.
A senior market analyst at City Index, Fiona Cincotta, stated: “Whether this proves to be anything more sustainable than a dead cat bounce remains to be seen.
“The US futures markets are also pointing to a stronger start for the Street, but it’s too early to get complacent that this correction has bottomed out.”