Market panic’s over – but ingredients are there for more thrills on the rollercoaster

After a few wild days for share prices, investors should keep an eye on oil prices, China's slowdown and the US Fed's interest rate to gauge the world's economy

Blink and you missed last week's turmoil on the financial markets. On Wednesday, billions were wiped off share prices; on Thursday and Friday they were wiped back on. The FTSE 100 index ended the week higher than it started. Just a bout of new year jitters? Can investors now settle back and enjoy a period of calm?

Probably not. It is easy to laugh, or groan, at markets' ability to swing from gloom to optimism, but volatility tends not to appear out of thin air. Take a step back from this week's excitement and remember that London's blue-chip index has lost about 1200 points since its closing peak of 7104 in April last year. The factors driving that 17% decline are unlikely to disappear quickly. Last week's brief panic suggests investors fear it wouldn't take much to intensify the pressure.

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