Britain and Europe
At risk of sounding repetitious, European and British markets continued to trade with their eyes on the U.S. markets and economy. This week, they also could gauge what the Federal Reserve might do about interest rates. They parsed Fed chairman Allan Greenspan's testimony before congressional committees on Wednesday and Friday. And no, he did not tell anyone when he would lower interest rates. However, he did tell them that he didn't intend to tell them when and if the Fed might act. As a result, the London FTSE and Paris CAC slumped on earnings disappointments and warnings. However, the Frankfurt DAX benefited from extended trading on Friday spurred by a turn around in U.S. markets and managed to end the week in positive territory. All three indexes are down on the year, with the CAC hurting the most.

Asia
Asian markets (except Australia) continued to plummet. Both the Hong Kong Hang Seng, at a nine month low and the Japanese Nikkei 225 were hit badly. Both are concerned with dismal technology stock performance and worries about how the U.S. slowdown will impact their economies. In Japan, investors are fretting over the crumbling economy, which reported more bad news (see indicator scoreboard below). They are also upset by the unstable political situation and are waiting for Prime Minister Yoshiro Mori, who has dug in his heels, to finally resign. When the Bank of Japan finally lowered its policy making interest rate, investors pretty much ignored it and focused on the U.S. Fed instead.

Investors are concerned that Wednesday's rate cut by the Bank the Bank of Japan won't be enough to bolster the sagging economy. Foreigners are now selling Japanese stocks aggressively, and traders see this as a no confidence vote by investors in Mori and Bank of Japan governor Masaru Hayami. For the first time in nine weeks, foreign investors sold more Japanese stocks than they bought in the five days ended February 23, according to Tokyo Stock Exchange figures.

The Hang Seng Index fell over investors' concerns about telecommunication revenue projections. Banks and developers added to the losses after Alan Greenspan dashed hopes for an interest rate cut before the FOMC meets on March 20.

Introduction   •   Global Stock Market Indexes   •   Recap of Global Markets   •   Currencies   •  Indicator Scoreboard

The Bottom Line   •   Looking Ahead