European shares climbed, with the FTSE Europe ex-UK index gaining 1.9% in sterling, total return terms, despite the currency weakening against the euro. Investors continued to seek the sanctuary of more defensive sectors, such as Telecoms and Utilities, while oil-related stocks benefited from vigorous demand for crude oil as prices again pushed record levels. Non-life insurers enjoyed an active period, as merger and acquisition activity returned.Financial stocks endured a particularly turbulent month, as they were buffeted by further revelations regarding sub-prime losses and concerns over the future of the wider global economy, while the European Central Bank (ECB) displayed a marked reluctance to reduce interest rates as inflationary pressures lingered.Nevertheless, the ECB attempted to ease the continued liquidity crisis by injecting a record amount of cash into the markets, in an attempt to calm yearend jitters. Trading was limited within the portfolio, but we did add to our position in UK telecoms giant Vodafone.
