It may well turn out to be a dead cat bounce, but leading shares are looking a little brighter at the moment.
The beleaguered property sector has seen some signs of life in the past couple of sessions after a couple of brokers turned positive - or at least, less negative.
Today Morgan Stanley joined the fray. In a note entitled "UK property shares - it's so bad, it's good", the bank said it expected a rally - albeit short - in the sector.
"We expect UK property shares to rally by at least 20% in the first half of 2008 as the Bank of England is forced to cut UK base rates by around 100 basis points in an attempt to avert a recession.
"Our key overweights amongst the UK majors are those stocks that performed the worst during 2007 - British Land, Segro and Brixton, and we have downgraded
last year's most defensive UK major, Liberty International, to underweight.
"We anticipate that once this counter-trend rally has run its course, say in mid-2008, UK property shares could approximately halve in value over the following 18 months as an economic recession drags down market rents and precipitates the insolvency of many highly leveraged investors."
Added to this, Graham Neale of Killik & Co said: "The FTSE real estate sector trades at an average discount to historic net asset value of about 30%, which we believe is good value despite the outlook for further asset value downgrades."
So British Land is up 5.3% to 969p, Hammerson is 45p higher at £10.68 , Brixton is 22.5p better at 328p and Segro is ahead 23p to 496.5p.
It was also a brighter day for retailers, with fairly upbeat statements from HMV, electricals chain Kesa and Primark owner AB Foods. These three have seen their shares climb by 7-8% so far.
But miners are still weak on worries about demand for metals if a US recession happens, while the London Stock Exchange has lost another 43p to £15.71 on competition fears.
The FTSE 100 is 13.6 points better at 5956.5 and the FTSE 250 has recovered 105.1 points to 9732.0. But dealers are nervous ahead of a speech on the US economy this afternoon by Federal Reserve chairman Ben Bernanke. There had been rumours earlier this week that the Fed was considering an emergency 50 basis point rate cut, and Bernanke's words will be scoured for any hint that this might happen.
