Recap of global markets

Europe and Britain

There was no place to hide. Virtually all index sectors were hit by selling as investors looked to find a safe place for their assets. The already fragile floor under equity markets seemed to collapse Friday when confidence evaporated. European stock markets were hammered to fresh eight-month lows as investors, fed up with waiting for an economic recovery feeding through to the bottom line, sold stocks across the board. Weak U.S. economic numbers didn’t help. European indices closed at levels last seen in the chaotic days immediately following September 11. Analysts said it was now all but pointless to look to technical support levels that might emerge in a market driven totally by sentiment and focused only on bad news. A daily stream of corporate bad news from the United States has combined with an uncertain global economic and political outlook to erode what confidence had returned to the post-Sept.11 markets. On the week, the London FTSE 100 fell 5.9 percent, the Frankfurt DAX sank 6.6 percent, and the Paris CAC fell 4.4 percent.

Asia

The herd instinct to sell also was apparent in Asia with the exception of South Korea. The Kospi rose 3.4 percent on the week. Strong domestic growth has provided support for the index, which is up 18.5 percent so far this year. However, investors bailed out of exporters’ stocks in Japan when U.S. retail sales fell. Growth in first-quarter Japanese GDP, which was reported last week, was entirely due to exports. The United States purchases about one-third of Japan’s exports, so disappointing news in the U.S. is very bad news in Japan. Japan’s Nikkei (which fell to a 15-week low) and Topix lost 4.5 percent and 4.3 percent, respectively. Singapore stumbled to a near six-month low, with investors rattled by corporate earnings worries and the prospects for U.S. economic recovery.