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Investment analysis

Corporate news from across the globe ensured that the markets had another tough week. Despite some better than exp-ected economic data from the US and Europe, most of the major world stockmarkets ended the week lower, with the representative FTSE World index losing 1.1 per cent.

US gross domestic product figures helped lighten an otherwise nervous mood, rising by 0.2 per cent in the fourth quarter compared with expectations of a 1 per cent decline.

Consumer confidence figures were also better than expected, as were manufacturing figures, with durable goods orders climbing by 2 per cent in December.

The unemployment rate also provided some cheer, falling by 0.2 per cent to 5.6 per cent, the first drop since last May. As expected, the Federal Reserve held rates at 1.75 per cent.

Market sentiment was driven by a sense of unease and scepticism over corporate acc-ounting following the collapse of Enron and by the high debt levels carried by companies after US telecoms company Global Crossing filed for bankruptcy protection earlier in the week.

Although European equities ended the week marginally lower, with the FTSE Eurotop 300 index shedding 0.1 per cent, there was some positive news from Germany, where a better than expected Ifo index showed that the eurozone&#39s biggest economy was in the early stages of a recovery, improving for the third straight month.

A strong finish to the week inspired by gains on Wall Street saw the FTSE 100 gain 2 per cent over the final two days to end the week modestly lower.

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