Footsie rally 'will not be repeated in 2010'

By Dan Hyde
Updated: 05:50 EDT, 26 December 2009

More than 80% of This is Money readers believe the FTSE 100 will not be able to repeat this year's strong gains in 2010.

Stuttering: Will the FTSE 100's barnstorming rally continue?

The blue chip index currently stands just above the 5,400 mark, but the survey showed that over 80% of readers expect it to stay below 6,000 in 2010.

Attracting 35% of the vote, the most popular finishing range for the index was between 5,500 and 6,000, suggesting that you believe the barnstorming gains of 2009 will tail off in the New Year.

A climb to 6,000 would represent a maximum 11% rise, far less than this year's 20%-plus gain.

While our poll showed that the highest proportion of readers expect the FTSE 100 to finish next year between 5,500 and 6,000, almost as popular was the 5,000 and 5,500 range, which is currently attracting a second-best 24% of the vote.

That meant that only 17% of voters suggested the Footsie can match this year's performance and go beyond the 6,000 barrier - and only 6% thought it would top 6,500 by the end of 2010.

After the financial crisis put shares in freefall back in the autumn of 2008, the FTSE 100 fell to a year-low of 3,512 in March this year.

But having bottomed out, investors have been enjoying an incredible rally since.

Gains of almost 2,000 points (or 50%) have lined traders pockets in the intervening period, and the FTSE 100 closed for Christmas at a new year-high.

The general consensus among analysts is that, barring unforeseen financial disaster, shares will build solidly on this year's gains in 2010, but will do so with much less vivacity.

According to some economists, though, the stock market's rally has been so rapid this year that it has been left somewhat bloated, and they now expect a readjustment in 2010 as a result.

However, a large marjority of This is Money readers don't foresee a return to the dark days of early March, with only 24% suggesting it will fall back below the 5,000 mark.

Market bears' talk of unsustainable gains have also been fuelled in recent weeks by FTSE 100's stuttering end to 2009.

The biggest factor in play here, bizarrely, has been signs of economic recovery particularly in the US. That could mean the end of rock-bottom rates and other attempts to stimulate the economy - the factors that have driven the rally in 2009.

However, if, as expected, the British economy does finally emerge from the depths of recession in the spring, market sentiment will be done no harm at all.

The poll is still open, so don't hesitate to let us know your views.

›› Vote now: Where will the FTSE 100 end 2010?

Biggest FTSE 100 winners (24 Dec 2008 - 24 Dec 2009):

1. Kazakhmys (+481.86%)
2. Vedanta Resources (+316.07%)
3. Fresnillo (+273.81%)
4. Xstrata (+212.18%)
5. Eurasian Natural Resources (+197.62%)

Biggest FTSE 100 losers (24 Dec 2008 - 24 Dec 2009):

1. Royal Bank of Scotland Group (-31.22%)
2. Land Securities Group (-22.90%)
3. SEGRO (-22.49%)
4. Wolseley (-22.26%)
5. Lloyds Banking Group (-19.36%)