Britain and Europe
Though all three equities indexes marginally improved in the second quarter, poor earnings persisted especially in technology, media and telecommunications. The British economy seems to be outperforming everyone else, yet the increasingly sour news in Europe has taken its toll not only on British stocks but on sterling and the euro as well.

On Friday the FTSE 100, in last minute support for some of the heavily traded and hugely liquid international shares, rallied just enough to finish 8.8 points higher than the end of the first quarter. That staved off a sixth consecutive quarterly loss, which might have further eroded confidence in the stock market.

After being subjected to weeks of intense merger speculation and a market rally of almost 20 per cent between March and May, the Paris CAC is deep into the realm of profits warnings. The technology sector has suffered from a severe shakeout as a result of slowing demand and shrinking earnings expectations, notably among telecommunications companies. The difficulties of the technology sector have coincided with mounting political pressure on French blue chip companies, which are trying to implement job cutting plans. Ahead of next year's presidential and parliamentary elections, the Socialist-led government of Lionel Jospin responded this month to union demands by introducing labor legislation amendments, which will make it harder for companies to lower staff levels. Draconian political control is certain to make foreign investors think again about holding French stocks.

Asia
Asian equities took heart from the Fed interest rate cut and rising U.S. equities markets and rallied at week's end. But for the most part, losses earlier in the week on the Nikkei and the Hong Kong Hang Seng were too large to be recouped in one day. Rather, the indexes suffered mood swings all last week and were quite volatile. In contrast, the Australian all ordinaries rallied 1.8 percent on the week, despite a declining currency and weakening commodity prices.

Only the Australian all ordinaries index, which was on the losing side at the end of the first quarter, turned itself around in the second quarter and is now 8.57 percent above its year 2000 close. South Korea's Kospi increased its positive stand during the second quarter. The Kospi, which had seen its index cut in half during 2000, has recouped 17.94 percent of that loss.

Americas
All North American indexes tracked here improved in the second quarter, especially in April and May. Both the Dow and Nasdaq, although still negative when compared with the end of 2000, improved, down 2.65 percent and 12.55 percent, respectively. In contrast, at the end of the first quarter they were down a respective 8.43 percent and 25.51 percent. The Toronto Composite 300 recovered only slightly and was down 13.40 percent compared with a loss of 14.84 percent at the end of the first quarter. Only the Mexican Bolsa was positive at the end of both quarters, increasing its 2001 gains from 1.34 percent at the end of the first quarter to 17.94 percent at the end of the second.

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

The Bottom Line   •   Looking Ahead