Britain and Europe
A long week finally trickled to a close ahead of the long weekend. Many European stock markets were closed on Thursday for Ascension Day and traders and fund managers took an additional day off. There was some light selling on Friday, with the market reacting nervously to the comments from Fed Chairman Alan Greenspan on Thursday night. He said there remained a risk of further weakening in the U.S. economy although the five cuts in U.S. interest rates so far this year should provide substantial support. As ever, the market was undecided about its interpretation of those remarks and whether further U.S. interest rate cuts were in the pipeline. Greenspan suggested that economic growth remains "sub-par," stressed the downside risks to growth and played down the risk of inflation.
The FTSE 100 continues to shy away from the magic 6000 level, ebbing down to close slightly lower on the week. The Paris CAC ended on the down side as well. Only the Frankfurt DAX managed to rally to finish the week marginally on the upside.
Asia
The Nikkei bounced around before closing below the 14,000 level on Friday. At the start of the week, there was some relief that in the re-weighting of the MSCI index over the weekend, Japanese equities' overall weight decrease in the global indexes was smaller than expected. MSCI will cut Japan's weighting by 1.6 percentage points in the MSCI World Index. MSCI said it was changing how it accounts for companies it tracks by giving credit to companies based on the percentage of their shares available for trading, known as free float, instead of a company's market value.
In Japan, there was more sober economic news about retail sales and continuing deflation, and more worries about the banking and technology sectors. To compound investors' problems, the yen inexplicably rose in value, leading to additional fears about exporter earnings.
Introduction • Global Stock Market Indexes • Recap of Global Markets • Currencies • Indicator Scoreboard
The Bottom Line • Looking Ahead
|
