FTSE set for 20% rebound by year end-survey

Investment banks believe the FTSE 100 will end the year above 6,000 points - despite the turmoil of recent weeks, according to a new survey.

The blue-chip index fell to 5,130 on Friday and is down 16% since early July, with many investors fearing a new recession.

But a survey by the Financial Mail of predictions by top investment banks suggests  they believe a rebound is on the way, with the average target for the FTSE being 6,040.

That would see the index rise by almost 20%, but would also mean it ended the year only 140 points up on where it started in January, at 5,902.

Many banks have been forced to bin previous predictions in the past few weeks, having forecast shares would rise to almost 7,000 before the sell-off.

However, some warned if Britain went into a deep recession, stocks would fall further.

'On a black-sky scenario, the European market would fall below the 2009 low,' UBS analysts said. The index hit 3,460 in March 2009.

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