Day Traders' Thread (April 2005)

LONDON (AFX) - World stock markets are set to build on this year's strong
gains in 2006, amid buoyant global economic growth and tame inflation, with
re-awakening economies Japan and Germany leading the pack, analysts said.
Stock exchanges posted multi-year highs in 2005 as mergers, coupled with
robust economic data and company results, offset record high oil prices and the
July 7 deadly attacks on London's public transport system.
Global stock markets are ending the year in style, with indexes in London
and Paris striking the highest levels for more than four years on Dec 23.
Frankfurt's DAX 30 has hit the highest levels for almost four years during
2005, while Tokyo's benchmark Nikkei-225 index has soared by about 40 pct over
the year to strike a five-year high.
US indexes saw single-digit percentage gains.
Next year will see "continual decent gains" in stock markets, according to
Barclays Stockbrokers' Hilary Cook.
"When the world's second-largest economy (Japan) has decided to wake up, and
when the world's third-largest economy (Germany) has decided to wake up, you can
feel quite optimistic about life because America has done an awful lot of the
running and cannot do it forever," she said.
Owing to growing optimism over the Japanese economy and a softer yen,
Japanese share prices soared higher in 2005, with Tokyo's benchmark Nikkei-225
index near the key psychological 16,000 points level just before Christmas.
Eurozone growth, meanwhile, is gaining momentum amid stronger-than-expected
economic activity in Germany, the biggest economy in the 12-nation single
currency area, the European Commission said earlier this month.
"Germany and Japan can drag the rest of the world along with them," Cook
added.
"Japan's partly being driven along by China and partly by internal
structural reform. It is very good news."
Meanwhile, Merrill Lynch analysts said that US equity markets would
"continue to perform well next year" with high single-digit returns.
"The overall trend of foreign equity markets outperforming the US remains
intact," they added, noting that "Japan and emerging Asia should be top
performers next year".
Mike Lenhoff, chief strategist at Brewin Dolphin Securities, predicted that
by end-2006, the Standard & Poor's 500 would reach 1,375 points, while London's
FTSE 100 index would hit 6,100 points.