HSBC Stockbrokers is taking a negative view of the prospects for equity markets for the rest of 2000, suggesting it will be the second half of next year before further progress is achieved. In its latest investment strategy report, the broker states it is expecting equity markets to drop in value by as much as 15 per cent by year-end with no sign of a recovery over the next 12 months.

It believes the best bet for investors at the moment is Japan where the outlook is for strong economic growth. It is also positive about the UK mainly because of the relatively good value in that market currently. It is particularly bearish on Wall Street's prospects in the short term and on European equities with the exception of Britain. Looking at various stocks, HSBC has a modest bias towards selected technology stocks - particularly infrastructure, telecom equipment and software together with financials. The report states the high growth parts of the market are more likely to offer opportunities on a relative basis in an impending economic downturn, but on a selective basis.