Global markets bounced back well last week, inspired by rallies in Japan
and here in the UK. All the major markets except Germany made gains over
the five-day period, with the broad-based FTSE World index up by 1.8 per
After weeks of profit warnings and earnings' downgrades, last week was
quieter on Wall Street as investors focused on what the Federal Reserve is
likely to do when it next meets this month. Economic data was mixed, with
the US purchasing management index down for July, consumer confidence also
fell in the month. Jobless data was better, with figures showing claims
dropped to the lowest weekly level since February.
In the UK, the momentum from the previous Friday, which saw the FTSE 100
gain nearly 2 per cent, carried through, driven in part by the technology,
media and telecoms sectors. Thursday saw a surprise 25bp cut in the base
rate by the Bank of England, which inspired the markets further, and FTSE
100's six-day 300-plus-point rally was only halted on Friday after weak
economic data prompted renewed concern about the outlook for corporate
European markets shrugged off poor economic news and a steady stream of
indifferent earnings' statements from corporate heavyweights, to end the
week in positive territory, with the FTSE Eurotop 300 gaining 1.6 per cent.
The BoE's rate decision raised hopes of the European Central Bank following
suit. However, eurozone rates were left on hold despite a weak purchasing
management index, which were in line with market expectations (lowest level
since 1998) and a fall in business confidence.