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Investment analysis

Growing fears about war in Iraq, disappointing corporate news and weak economic data sent global bourses lower last week, with the benchmark FTSE World index shedding a further 2 per cent.

In the US, news from the retailers and poor economic news ensured that it was a losing week for markets. Sears Roebuck was among the biggest fallers in the sector after it reported worse than expected results and Costco Wholesale, the biggest Warehouse club operator, announced a fall in profits. Sentiment was also dampened by the employment report, which showed a bigger than anticipated layoffs in February. Markets did firm up at the end of the week on unconfirmed reports of the capture of Bin Laden&#39s eldest son. By Friday&#39s close, the Dow, S&P & Nasdaq had fallen by 1.9 per cent, 1.5 per cent and 2.3 per cent respectively.

European bourses were hit har-der than most last week. German pharmaceuticals company Bayer came under pressure as the markets reacted to further litigation claims concerning Baycol, its anti-cholesterol drug which was withdrawn in 2001.

Friday was another tough day for the European insurance sector, with Dutch insurer Aegon&#39s depressing full-year figures and Swiss Life&#39s poor 2002 results rippling through the sector. French media group Vivendi Universal was also punished after reporting the biggest loss in French history of e23.3bn.

In the UK, the focus was also on the life insurance sector, with Friends Provident following the Pru in hinting at dividend cuts. Bid speculation was the other dominant theme, with hotels and leisure the centre of attraction. The FTSE 100 ended the week below 3,500. The FTSE 250 & Small Cap indices fared a little better, losing 2.8 per cent and 17 per cent respectively. The Bank of England left base rates unchanged.

In Japan, the Nikkei 225 closed down by 2.6 per cent to 8,144.12, a level last seen in March 1983.


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