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WEEKEND WEB: Luxury brands help boost the Italian market

Scott Woods
Scott Woods

SCOTT WOODS pens our weekly look at global finance, Money Matters.

Following an impressive run, investors in the stock markets of the US and Eurozone region paused for breath last week.

Gains were pared by the strength of sterling against a basket of currencies, following an easing of tensions in the latest round of Brexit negotiations.

The FTSE 100 index ended higher, having lagged overseas stock markets over the last few weeks. Commodities, or natural resources, such as copper and oil rose over last week.

Elsewhere, good growth prospects in Asia and the emerging market region (countries such as Taiwan and South Korea) helped drive share prices higher. Gold capped a lacklustre few weeks and ended in positive territory.

Much like a carefully-crafted sequel to a good film, the global economy is on track next year, to enjoy solid growth at a pace slightly higher than that enjoyed this year, according to the International Monetary Fund.

The organisation expects the world economy to expand by 3.7 per cent in 2018, versus its forecast of 3.6 per cent for this year, with lacklustre expansion in the US and UK offset by improvements elsewhere.

While these growth rates may not be exactly fast and furious, let alone 2 Fast 2 Furious, they may help keep investor morale buoyant.

The top performing G7 stock market so far this year is Italy. The FTSE Milano Italia Borsa index is up 19.5 per cent year- to-date, beating the French CAC 40’s 13.2 per cent and the German DAX’s 12.9 per cent in euro terms.

The Eurozone currency has been relatively strong, so Italian returns are even higher in sterling terms, increasing by 25.3 per cent. Part of the reason is a bounce-back after Italian shares fell sharply in early 2016. But the country bristles with strong brands, global marques such as Ferrari, whose shares have raced ahead 80 per cent and smaller ones such as luxury ski jacket outfitters, Moncler, whose shares have climbed 49 per cent year-to-date.

The value of investments and the income they produce can fall as well as rise. You may get back less than you invested.


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