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Investment analysis

It was a mixed week for international equity markets, which had to contend with the start of a busy reporting season, the impact of Sars and an increasingly uncertain economic environment. By Friday&#39s close, the benchmark FTSE World index had edged down a marginal 0.1 per cent.

In the US, markets had a relatively strong start to the week, spurred on by positive earnings news from pharmaceutical groups Pfizer and Eli Lilly and President Bush&#39s support of another term for Alan Greenspan as Federal Reserve chairman. As the week wore on, markets continued to be supported by earning news, much of which beat estimates. However a lack of forward guidance and some profit taking particularly in the blue chips, made it a mixed five days for US equities. The Dow finished down 0.4 per cent, the broader based S&P 500 gained 0.6 per cent and the Nasdaq 100 ended flat.

Profit taking also saw European bourses give back some of the gains from previous weeks. On Wednesday, both Germany&#39s Dax and France&#39s CAC40 breached the psychological 3,000 level on the back of positive first-quarter earnings reports from the US. However, these indices ended the week 2.1 per cent and 1.1 per cent lower respectively.

A warning from German car manufacturer DaimlerChrysler of deteriorating market conditions in the US hit the sector and bourses at the end of the week – the benchmark FTSE Eurotop fell 1.3 per cent.

In the UK, the senior index flirted with the 4,000 level on Wednesday, gaining 1.3 per cent on the day.

However, concern over Sars, a slow global economy and the fallout from the War in Iraq saw a broad based sell-off on Friday, leaving the footsie nursing a 0.5 per cent loss by the end of the week.

There was better news elsewhere, though, with buying in the mid & smallcap arena supporting the FTSE 250 & FTSE small cap indices which gained 0.9 per cent and 2.5 per cent respectively.

In Japan, despite some strong profits from domestic companies, both Nissan and Mitsubishi reported decent profit figures, further selling pressure on blue chips by the pension funds saw the Nikkei 225 test fresh 20-year lows and end the week 2.2 per cent lower.

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