Fears of a fresh global recession that have sent global stock markets plunging in recent days are again expected to dictate activity in London next week. The FTSE 100 index dived 5.25 percent over the week to finish at 5,040.76 points on Friday, slashing billions of off the value of its 100 listed companies, which include majors such as BP, HSBC and Vodafone.
The FTSE had managed to post a 1.39-percent gain the previous week, having plunged by almost 10 percent prior to that on fears of a new global downturn.
"It doesn't matter how many (share price) bargains there are, what matters is how many buyers there are," said Henk Potts, stock market strategist at Barclays Wealth. "Until investors can look through the dark clouds of fear, the promised land of cheap valuations is nothing more than an academic debate."
While markets worry that the United States in particular could face a new downturn, Britain's economy is faced with its own weakness and worse could be in store when the latest official estimate of British growth is published on Friday.
The Office for National Statistics next week unveils its reading for gross domestic product (GDP) during the second quarter. The first estimate published last month showed Britain's economy, already struggling to absorb deep budget cuts, slowing to just 0.2 percent in the second quarter.
Last week meanwhile, the Bank of England forecast that the economy would grow less than expected this year amid concerns over the eurozone debt crisis, markets turmoil and government austerity measures. The BoE predicted GDP would grow by about 1.4 percent in 2011, compared with a previous forecast of 1.8 percent in May.
"Global growth concern is a big part of what we are talking about here and believe me, words such as recession and double dip have genuine meaning," said Howard Wheeldon, senior strategist at stockbrokers BGC Partners.