UK equities are reluctant to respond to positive economic news

UK equities offers good value and several conditions are in place for it to have a good run.

UK equities offers good value

UK equities offers good value

Last week brought another batch of positive UK economic statistics.

Inflation for October came in below expectations at 0.9 per cent. At the same time economic activity remains high. Unemployment fell to an 11 year low at 4.8 per cent and retail sales grew at their fastest rate for 14 years. All this ‘despite Brexit’.

Yet the market isn’t in much of a mood to celebrate. True it’s had an OK week and feels a shade better than it did at the start of the month; but it’s still hard work out there for investors. In contrast Wall Street has enjoyed a run into all-time-high territory, ‘despite Trump’.

If US equities continue to build momentum, it would be unusual for our market to resist their gravitational pull. But even without overseas support, the UK’s economic background makes it tempting to load up on equities while they’re lacklustre.

We can also add an ultra-competitive currency to those other positive factors mentioned above. So if the market did go on a run it wouldn’t be a huge shock in the circumstances.

There’s certainly value available in the eyes of some buyers. Last week the event services company Avesco announced an agreed takeover.

The deal came at a staggering 125 per cent premium to its prevailing share price, valuing the company at £124 million.

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