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News: Markets lower in October, despite late rally

Despite a last-minute rally on the back of several takeover deals, the total shareholder return (TSR) of the FTSE All Share Index fell 2.9% in October - its worst performance for the month since 1987 when stock markets around the globe suffered huge losses - and well below the average gain in TSR of 0.3% for October since 1986.

Total Shareholder Returns (TSR) is a measure of the total return a stock has returned to an investor in terms of both share price growth and dividend yield, assuming the dividend payments were reinvested in the companies that issued them.

In the market itself department store group Marks & Spencer was the best performing stock in terms of TSR last month, with an increase of 10.7%. Shares in the retailer rose following a broker upgrade and a Q2 trading statement reporting encouraging progress.

Meanwhile, mobile phone operator O2 experienced a 4.1% gain in TSR - the company agreeing to a £17.7 billion takeover offer from Spanish rival Telefonica.

Poorest performing stock was telco Cable & Wireless, with a TSR of -23%, after it warned of a 6% fall in first-half revenues at its core UK business.

From a sector standpoint the best performer was Health, which recorded a TSR of 1%. Bringing up the rear were Steel & Other Metals and Forestry & Paper - both delivering a TSR of -11%.

John Bearman, head of UK equities, makes the point that following successive months in which the FTSE repeatedly reached four year highs, October saw an abrupt halt in the market's upward trajectory.

Investors, buoyed by recent gains, cashed in whilst persistent concerns about the US economy and UK consumer confidence weighed heavily on the FTSE. Continued corporate activity by companies such as Hilton Group, P&O and O2 provided some support to the market in an otherwise lacklustre month.

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