Hibernian Investment Managers remain positive on the outlook for equity markets for the rest of 2000, favouring prospects in the US and European equity markets for investors.

In a recent report, it says it has become slightly clearer that the US and global economies are slowing and inflation remains muted.

Ireland is the exception with inflation hitting 6.2 per cent recently, partly driven by higher oil prices and a weaker euro.

Bond markets, particularly in the US, have responded positively to the weaker economic data and sentiment is moving towards the prospect of lower interest rates.

Hibernian says that, with the sentiment on interest rates now very positive, it is natural for stock markets to react positively and the moves in August have reflected this. It says that, despite some slowdown in earnings momentum, the outlook for equity markets remains positive to year-end.