Market Commentary

Going into the final stages of trading, the FTSE looks set to finish
 slightly up after a late surge.

 The worse-than-expected retail sales figures published earlier set the
 tone
 for the UK market for most of the day. Economists had predicted a 0.3%
 advance, so the drop of 0.6% was particularly damaging for confidence
 levels
 - especially after the consecutive gains of the past three months. With
 fresh talk of green shoots almost a daily occurrence now - and often on
 the
 back of fairly minor and insignificant economic news - the poor display in
 the retail sector will unavoidably dent some of the pervasive optimism.
 Nevertheless, after a positive start from the Dow, the FTSE managed to
 rally
 strongly in late-afternoon trading and the full force of the retail
 figures
 will be felt in the currency market, where the pound fell to its lowest
 level against the dollar in over a week.

 The surprise rebound for the FTSE this afternoon will have investors
 wondering whether this is the start of a short-term recovery that would
 see
 the index head back to the 4500 level - or maybe even beyond this time. Of
 course, the alternative, and one which may not seem particularly
 implausible
 after some downbeat data, is that we're simply watching markets trundle
 upwards before dropping off a cliff. The big topic at the moment remains
 regulation - what form will it take and will it be perceived to help or
 hinder blue-chip business? Until some of these thorny issues are put in
 the
 open, and unpicked, we may see a continuation of the fairly flat trading
 patterns of late.