Europe and Britain
Trading was very volatile as the third quarter neared its end. Traders squared positions while many investors bailed out of equities after some high-profile companies issued disappointing outlooks and results. However, both the London FTSE 100 and Paris CAC managed to overcome losses earlier in the week and finish on the upside for the first week in five. The DAX was not that fortunate. German economic prospects look bleak and the election results did not give a strong mandate to the victor. Analysts and investors see little possibility that tough issues such as labor market reform will be tackled soon. The FTSE 100 Index rose after setting a six-year low on Tuesday.

Asia
Only the Nikkei and Topix managed to end the week on the plus side as worries about weakening U.S. demand for Asian exports eroded investor confidence. The Kospi, which had been the stalwart index until now, sank to its lowest level of the year. Japanese banks rose as investors waited for more details about the Bank of Japan's plan to buy equities from failing banks and after a newspaper report said the BoJ will urge the government to bail out ailing banks aggressively with an injection of taxpayer money. In Hong Kong, where deflation is rampant, the Hang Seng reversed direction after the government said it plans to help boost property prices, which would benefit heavyweight developers.

Japanese capital flows in the week ended Sept. 20 showed that Japanese investors were again net buyers of foreign bonds and modest buyers of foreign equities. Foreign investors were again heavy net sellers of Japanese equities and also heavy net sellers of Japanese bonds, according to data released by the Ministry of Finance. The data reflects the trading period following the Bank of Japan's decision to initiate a scheme to buy shareholdings from commercial banks.

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