LOOKING back on it, the weekend of April 22-23 was when the financial skies subtly started to darken. Things felt fine at the time. The nation celebrated the Queen’s 80th birthday, 47,000 masochists ran the London Marathon and there was even wild talk of England doing well in the forthcoming World Cup (hah!). In the financial markets, sentiment was indubitably bullish: the FTSE 100 had that week smashed through the 6,100 level for the first time in five years.

But it has proved to be a high water mark. Sentiment has soured. Investors who then saw the glass as half-full now see it as half-empty. Pundits and regulators who then talked of reasons to be cheerful now fret about reasons for caution.

The trigger, of course, was a significant deterioration in the outlook for world inflation and therefore the threat of higher than expected interest rates. Share prices plunged in May as investors took cover. Big slumps in emerging market assets and fears of a commodities bubble kept investors nervous.

Geopolitics took over as the main dampener in the past month. The worry that Iran or Syria could be drawn into the Israel-Hezbollah war has badly dented confidence.

In London shares have now clawed back two thirds of the losses since April, but there is no doubt that attitudes to risk have altered in the past three months. At the very least, the thinking goes, the market needs to pause after a three- year bull run.

How have individual shares reacted to this more nervy environment? In very different ways, as the tables illustrate. Since that weekend the best performer in the FTSE 350 has motored 41 per cent higher, the worst has slumped by 41 per cent. Investors who think it’s impossible to make money in these more difficult markets should think again. Of the 100 biggest listed companies, no fewer than 41 have made gains since April, 21 of them putting on more than 5 per cent.

The winners include defensive stocks such as utilities, mortgage banks and food producers. Bid targets Enodis, Associated British Ports and McCarthy & Stone are among the winners, of course. But so, too, are firms that have wrongfooted the market with sparkling, or at least better than expected, figures. They include Tate & Lyle, Capita and easyJet.

The majority of companies have, however, lost ground since April, sometimes with good reason. The arrest in the US of David Carruthers, chief executive of BetOnSports, has understandably clobbered the online gaming sector, hitting PartyGaming and 888 Holdings. Profit warnings from the cruise company Carnival Corporation and market researcher firm Taylor Nelson Sofres explain their share price dives.

But other losers are less explicable, or at least seem more likely to be reversed. It is here that the opportunistic investor might usefully ferret out bargains. Some share prices seem over-punished. Among financials, fund managers have taken a pasting, especially those with big emerging markets exposure. Aberdeen Asset Management has been marked down 21 per cent and Schroders is 17 per cent lower. If the current market jitters fade, these could bounce.

Among the financial blue chips, the 10 per cent and 8 per cent battering meted out to Legal & General and Barclays, respectively, looks a bit overdone when compared with their peers. Building products distributor Wolseley is another blue chip that seems to have been excessively hit, its shares marked 18 per cent lower despite rock-solid recent results. Investors are right to be cautious about the US construction sector, which Wolseley supplies. But the reaction seems a bit overdone. Hanson, down 14 per cent, and Ashtead Group, down 41 per cent, have been similarly targeted.

The advertising famine has caught out all media stocks. There may be worse to come, but Trinity Mirror, down 20 per cent, and ITV, down 13 per cent, begin to look like speculative buys.

Among engineers, Laird Group, down 20 per cent, and GKN, down 19 per cent, have also been hit by worries about the US, a key market for both of them, and are starting to look rather good value. Would-be buyers should hold off until next week when both report interim results.

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