Europe and Britain
After three down days, equities in London, Paris and Frankfurt decided it was time to look up. Spurred on by the better Nasdaq performance, the indexes moved up on telephone, telephone equipment and technology companies. There was a question in investors' minds whether the steep declines had been justified given the profit outlook in the long term. Telephone companies, with their heavy debt loads due to mobile phone licenses and network expansion, turned up because they would be a big beneficiary of lower interest rates. The yet to come lower rates in Europe and Britain would lighten debt servicing costs.

Asia
The value of Japan's stock market continues to erode. Analysts said the drop has been caused by considerable pessimism about the country's economic prospects among non-Japanese investors. Some brokers described the slump as a wake-up call to Japan's government on the need for economic reform. The Nikkei has become the worst performing stock index of all the majors. It is only 400 points above its post-bubble low of 12,787 reached in October 1998. It is very hard to believe it once traded above 39,000.

Foreign investors say that there is no incentive to buy and hold equities at this point given the seasonal factor, which refers to how Japanese investors unwind cross shareholdings ahead of fiscal year end on March 31. This type of share selling has picked up pace because of the government's failure to introduce measures that would support the economy. In contrast, U.S. interest rates were cut and taxes in some European countries have been cut to aid economic growth.

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

The Bottom Line   •   Looking Ahead