Although you may have seen a number of scary looking characters lurking from door to door last night, this is nothing compared to the scare investors have had to endure over the past few weeks.

Like an old lady opening the door to a group of ghoulish teens, there seems to be a lot of nervousness in the market.

This resulted in the FTSE All Share Index falling by more than six per cent in just over two weeks, before it saw a small bounce.

Whether the market will recover in the run-up to Christmas remains to be seen.

Some sectors are unlikely to recover and will see the pressure mount over the coming months.

There has been a similar story in the US, as markets lost four months of gains, over a relatively short period.

One of the reasons for this is the continuing rise in US interest rates, which, by the end of next year, will probably have risen from their low of one per cent, to over 4.5 per cent.

Although UK rates have not increased as dramatically as the US, consumers are certainly less carefree about their spending habits, than this time last year.

While your electricity and Council Tax bills may have increased, it is the price you pay to fill your tank with petrol that really makes your eyes water.

This, coupled with a stagnating housing market, has finally begun to affect consumer spending.

Proof of the fact that things are starting to get a little tight, was the report last week that court actions to repossess homes are now at a 12-year high.

The sectors most influenced by this have been general retailing and banking, both of which have underperformed the wider market over the past two years.

While many banking stocks are now looking very attractively priced, this is not the case for the general retailers.

Tough trading conditions have not only affected sentiment, but have had an instant hit on companies' profits.

This pinch may have also been felt last night, as trick or treaters find that people are less willing to hand over their hard-earned money.

With Christmas just around the corner, it seems unlikely these dark days are completely over.

Although over recent years January sales may have started earlier and earlier, it's possible that this year high street shops will be starting their traditional January sales in December, in order to entice customers in before Christmas.

While this may be good news for consumers, it is unlikely that many general retailers will share this joy.

Like with every year, I am sure there will be winners and losers, although the largest loser may end up being those people heavily invested within the general retailing sector.

The one company which seems to be swimming against the tide is Carphone Warehouse.

With the new "must have" mobile phones now able to do things never dreamt of ten years ago, shoppers will be scrambling to update last year's handsets.

Another fact benefiting the company is that the average Carphone Warehouse customer is unlikely to be affected by rising fuel costs and Council Tax bills, and will be more concerned with what Santa brings them for Christmas.

While, for most people, shocks and scares may have been limited to last night, for the general retailers, this may last a little longer.

* Michael Rankin is based at the Teesside office of Wise Speke and can be contacted on (o1642) 608855.

Published: 01/11/2005