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According to Mike McCudden, head of retail derivatives at Interactive Investor, a growing rift between the leaders of some of the largest economies in Europe is having the effect of reducing investor confidence and therefore many traders have now pulled out altogether in the run-up to the new year.
He commented: "We're currently looking at a two speed pseudo-federal eurozone controlled by a rather fragile looking Franco/German pact. The feeling now is that this could all end in tears."
Mr McCudden added that the only country within the single currency which appears to be getting its act together at present is Ireland, with nations like Greece still mired in uncertainty.
Earlier this month, Sanjeev Shah, portfolio manager at Fidelity Special Situations Fund, advised investors to put their money into shares which are presently depressed in regard to their historic performance.
He argued that when the markets eventually rise, these investments will pay dividends.
Posted by Greg Secker
