The UK stock market may be in the first stages of a bear market lasting six to nine months, Fidelity International star fund manager Anthony Bolton said on Thursday. "It's been my central case that after a four-year bull market we are more likely to have a bear market than a correction and then the bull market continues," Bolton told Reuters.
"It may be that we are in the first stages of that (a bear market). A typical bear market lasts six to nine months." Bolton, who runs the 3.1 billion-pound Fidelity UK Special Situations Fund and the 410 million-pound Fidelity Special Values investment trust, in 2003 correctly called the start of a bull market in UK stocks that has lasted over four years.
His comments on Thursday come after a turbulent summer for equity and credit markets, prompted by concerns that a surge in defaults in the US subprime sector - which lends to risky borrowers - could lead to a wider financial crisis. The FTSE 100 blue chip index, which in July traded above 6,700, fell below 5,900 in August although it has since recovered strongly and on Thursday closed at 6,486.4.
"I think we are going to be in a more difficult environment for a while. Investment markets have rallied strongly and in the short term that can go on. But when the evidence of the effects come into the real world (it will be difficult).
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