Late bounce lifts equities off the lows

Markets remain firmly in the red, with the FTSE 100 35 points lower as the session draws to a close.

• Host of reasons to sell, but bears running out of steam
• ‘Boring’ stocks in favour on the FTSE 100
• Oil unshaken by surprise build in US inventories

Stocks are falling, volatility is on the up, China’s economic growth appears to be weakening and we even have a military coup to deal with. On the face of it, the situation would be ripe for a big selloff in equity markets, but this is not 2008 or even 2015. Below the surface some sectors, such as utilities, are recovering, while in the UK and Europe markets are off their lows. It is options expiration week, and a look at positioning through put/call ratios suggests sentiment has become excessively bearish. Plus, Thanksgiving is on the horizon, and the week before this all-American holiday tends to be a good one. The bears can almost taste victory, but I suspect that 2017 will work its
 magic once again and the dip buyers will have their way. A look at the leaderboard of the FTSE 100 this afternoon confirms the ‘buy safe havens’ theme among investors this afternoon – silver and gold miners, utilities, insurers and the thoroughly boring but successful business Bunzl top the index, but with most of the mining sector down heavily, the index remains firmly in the red.

A surprise jump in crude oil inventories has not had a particularly negative effect on crude prices, which have managed to hold their ground. The sellers threw the kitchen sink at the price yesterday following the IEA’s decidedly downbeat assessment on global demand for 2018, but for now there isn’t much sign of a follow-through on selling. The broader geopolitical situation in the Middle East is likely to hold greater sway for the time being, giving crude bulls further reason to keep buying.