Britain and Europe
The London FTSE 100, Frankfurt DAX and Paris CAC finished another dismal week on a downbeat note with blue chip and technology stocks losing ground. Telecommunication stocks were very much in focus in London with the FTSE telecoms sector dropping to a four-year low, below the trough seen last September and completely eradicating the fourth-quarter's 44 percent rise. Banking stocks were prominent losers as were media stocks. European markets continued to be influenced by the up again, down again trading in the United States, especially in afternoon hours after the NYSE and Nasdaq have opened.

Asia
Investors continue to focus on Japanese stocks as they await a definitive government plan for dealing with the bad debt of the nation's banks. For example, bank stocks rose after Finance Minister Masajuro Shiokawa said measures to support stocks and hasten the disposal of bad loans would be part of the nation's plan to end 2 1/2 years of deflation. The country's 136 largest banks held an estimated 36.8 trillion yen of non-performing loans at the end of September 2001. The decline in general prices has eroded the earnings of companies, making it harder for them to pay back loans. As bad loans mount and the value of stock and real estate collateral falls, banks have cut lending. The government wants to reverse the five-year decline in lending that has starved the economy of fresh credit.

On Thursday the Japanese stock market surged 461 points or 4.7 percent, enjoying a rare moment in the sun on optimism that the incipient turnaround in the global technology market would lift Japan's high-tech companies. The Nikkei, which has languished along with the Japanese economy, is still down 1.8 percent on the year. Its poor performance stands in sharp contrast to its Asian neighbors, whose stock markets have rallied this year in anticipation of rising technology exports. Despite Thursday's surge in stock prices, Japan remains mired in deep gloom. Some analysts regard the rally as little more than a brief interlude before the Nikkei's long dreary saga resumes. Earlier in February, the index traded at an 18-year low. There's been speculation that government-related pension funds have been buying shares to support the market before fiscal year-end on March 31. The government has already set up a fund that will negotiate market purchases of shares held by banks, which might put a floor under stock prices.

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