The UK is now officially back in a bull market - but what does it mean?
There are two ways to describe the different phases of a stock market: one is a bull market when share prices are generally rising and the other is a bear market when they are falling.
These act as a kind of shorthand for City types to describe the sentiment of investors and indicate the future direction of markets.
Bullish investors tend to be upbeat about economic growth and anticipate that stocks will rise in price. Bears are pessimistic and see threats like recessions looming.
How do we know what kind of market we’re in?
The technical definition of a bull market is when stocks have rallied by at least 20% from their lowest point.
Conversely, the term bear market is applied when there has been a 20% fall in prices from peak to trough.
The FTSE 100, the UK’s main share index, rose past the 6,000 point on Wednesday, meaning it is now 22% higher than the low of 4,993 reached on 23 March - making it a technical bull market.
It has no tangible implications other than signalling the market is more confident.
The reversal into a bull market has been stark and means the UK has had its shortest bear market in history.
The FTSE 100 has only had five bear markets in its 30 year history before coronavirus: 1987, 1998, 1999, and 2007, according to AJ Bell
The 1998 bear market lasted 77 days but the 2020 bear market lasted only 66 days before stocks started rallying.
Before that stocks had their longest bull market in history, with the FTSE 100 in bull market territory for more than a decade.
No one knows if the 2020 iteration will last as long.
