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Investment

Apprehension about a US attack on Iraq seemed to dictate the direction of trading and left global markets immersed in a sea of uncertainty last week with most ending lower.

Thin trading was experienced throughout a volatile week in the US. The Dow enjoyed two positive days early on but ended with three successive down sessions following the anniversary of September 11, losing 1.4 per cent over the week. Honeywell led losses on the Dow on Friday with a near 17 per cent fall after conceding that its third-quarter and full-year results would fall short of expectations. The Nasdaq gained 0.2 per cent, boosted by a better than expected earnings&#39 report from Adobe late on Thursday.

US economic news was mixed. The Fed&#39s beige book confirmed that US economic growth had slowed while September&#39s University of Michigan consumer sentiment index, though lower than August, still signalled continued resilience among consumers.

European bourses were dragged lower by insurance & telecom stocks. The benchmark FTSE Eurotop lost 2.5 per cent while Germany&#39s Dax and France&#39s CAC40 fell by 3.6 and 2.8per cent respectively.

MobilCom, the German mobile operator lost more than 50per cent on Wednesday after reports that part-owner France Telecom was about to sell its stake. The insurers saw losses of up to 10 per cent on Friday following news that Allianz, Europe&#39s biggest insurer, had to pump $750m into a US subsidiary to cover asbestos-related claims.

In the UK, the quarterly indices review saw EMI, International Power and British Airways leave the FTSE 100 which broke a five-day losing streak on Tuesday but followed the US market down as the week wore on to finish 2.4 per cent lower.

UK economic data included labour market figures which were better than expected as unemployment fell by 6,400 and average earnings data which was higher than expected at 4 per cent year on year.

In Japan, the Nikkei 225 recovered from a 19-year low to end the week 1.2 per cent higher. On Monday stocks, particularly the banks, reacted well to pledges from the government of an anti-deflation package to stimulate the economy.

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