Europe and Britain
In somewhat spastic trading, the FTSE and CAC managed to hold onto gains and finish on the plus side for the week. The FTSE also stayed above its December 2002 close. The DAX however, was lower on the week. German economic data were dismal and eroded investor confidence. Unemployment rose and manufacturers' orders and industrial production sank precipitously, auguring continued stagnation for the economy that was once Europe's engine of growth. The euro's incessant climb, while soothing some egos that had suffered when the euro was being bashed by the dollar, is beginning to dent exporters' sales and profit margins and will make it more difficult for the economy to crawl out of its hole absent a big pickup in domestic demand.

Asia
Only shares in Australia lost ground on the week as investors try to gauge the impact of SARS on the Asian/Pacific economies. While Australia has avoided the illness so far, much of its trade and business is conducted with the most heavily affected areas, stymieing exports severely, especially for food products. Hong Kong's Hang Seng is recovering from the sharp declines that occurred at the heat of the epidemic there. With tourism virtually non-existent and buyers shunning Chinese manufacturers, there is concern that Hong Kong will topple into a recession while mainland China's spectacular growth will be subdued.

In Japan, a new public body charged with turning around some of Japan's struggling borrowers plans to buy up loans belonging to as many as 400 companies over the next two years. The Industrial Revitalization Corporation, which started business on Thursday, has been licensed to spend up to ¥10,000 billion ($84 billion) amounting to almost a quarter of the official estimate of ¥43,000 billion in bad loans that is swamping the banking sector. The new body is mandated to buy problem loans belonging to salvageable companies, repackage them and sell the loans back to the market. In some cases the IRC, as well as buying loans, would provide fresh investment to build a company's competitive advantage. The IRC denied it would become a warehouse for "zombie" companies, saying it aimed to sell them as investments within three years of purchase.

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