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Investment analysis

Many of the world&#39s major equity markets reached new highs for the year last week before some worse than expected employment numbers took the shine off what was another positive week for stocks. By Friday&#39s close, the FTSE World index was 1.2 per cent higher, up by just over 25 per cent since the start of the year.

In the UK, the Bank of England&#39s monetary policy committee voted to keep interest rates on hold following November&#39s quarter-point hike. This came as no surprise to the market which ended the week higher although the FTSE 100 was once again unable to hold on to the 4,400 level after slightly disappointing statements from Barclays and GlaxoSmithKline, with shares in both firms falling sharply.

By the end of the week, the FTSE 100 was trading 0.6 per cent higher while the FTSE 250 rose by 1.2 per cent. However, it was a slightly disappointing week for smaller companies, with the FTSE SmallCap index only managing a gain of 0.3 per cent.

US stocks started on a positive note on the back of better than expected manufacturing data, with both the S&P 500 and Dow Jones hitting 18-month highs while strong buying of technology shares saw in the Nasdaq reach its highest level for 22 months.

However, profits were taken on Friday following the release of worse than expected employment data, with only 57,000 new jobs created in November, well short of the 150,000 that had been pencilled in by most economists.

In spite of this setback, both the S&P and Dow Jones ended in positive territory, rising by 0.3 per cent and 0.8 per cent although Friday&#39s fall in the technology sector was more severe following a slightly disappointing trading statement from Intel, leaving the Nasdaq 1.1 per cent lower on the week.

In Europe, stocks jumped to their highest level of the year on Monday, with investors encouraged by the latest economic data although as elsewhere prices fell back on Friday. By the end of the week, the FTSE Eurotop 300 index was 0.7 per cent higher, with Germany&#39s Dax again producing the strongest returns following a rise of 2.6 per cent.

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