"The UK equity market generally does look lowly valued but moving from the international earners to the domestic involves taking a long term or slightly hopeful view of the value on offer and may not give early gratification. Very event dependent but a lot of bad news is baked in."
He added: "Emerging markets have been under a cloud because of strength in the dollar and a rise in dollar interest rates. This looks to be largely in prices, with the Fed showing early signs of sensitivity to global growth and the dollar’s strength featuring as a grumble in a number of US earnings reports.
"Valuations in EM are unusually low and they should do well as dollar worries fade, especially those which are consumers of oil, where recent price weakness helps on the inflation and the demand fronts. Similar arguments apply to the Asian growth economies."
david.thorpe@ft.com
