IT is officially a Bear

A Bear Market is officially defined as the point where it drops 20% or more from its previous high. On Friday that is exactly what happened for the NASDAQ. It closed at its high of 2859 on 31st Oct but closed at 2271 on Friday night. Simultaneously, the FTSE UK SCS Index – of probably the most relevance to HotViews readers – was also declared an Official Bear. It hit a high of 628 in early Nov 07 but closed Friday on 494. Interestingly the Techmark100 is still quite a way from Bear Territory – it hit 1748 last Oct but is currently ‘only’ off 11% from its high.

As you can see from the table below, February was just a continuation of the downward spiral – albeit not quite as steep as in January. Hardware was the worst performer – off 15% in Feb and 24% YTD.

Support Services, however, was up 1.6% in Feb. This, you will recall, is the sector which covers the business support players like Capita and Xchanging as well as many of the ITSAs. In my opinion, the BPO players will be the safest haven in this storm. This prediction has certainly proved correct so far.

I wish I could say that the worst is over – but I can’t.

Note - For a more detailed analysis of the performance of individual UK SCS shares see http://www.megabuyte.com/