View more on these topics

Investment analysis

Following a poor Monday, international bourses moved ahead strongly last week as investors reacted positively to the possibility of a Fed rate cut this week and the International Monetary Fund&#39s $30bn Brazilian rescue package. The FTSE world index made up some of the ground lost in July, gaining 4 per cent.

Negative sentiment swept through Wall Street early in the week following the release of data on the US service sector activity which showed it to be weaker than expected. However, four consecutive days of gains on the back of an anticipated Fed rate cut, a stronger dollar and short covering saw the Dow and S&P Composite end the week 5.2 per cent and 5.1 per cent higher respectively.

Gains were broad among all sectors, with interest-rate sensitive financials Citigroup, American Express and JP Morgan Chase performing well. Bullish sentiment was also fuelled midweek by Cisco Systems when the company reported sales and earnings figures ahead of analysts&#39 expectations. However, problems continued at Worldcom with a further $3.3bn in improperly accounted earnings being uncovered. Although slipping back slightly on Friday, the tech-heavy Nasdaq 100 still gained 5 per cent over the five sessions.

Having started the week poorly, a 4.4 per cent one-day gain on Tuesday and a strong finish to the week ensured the FTSE Eurotop 300 ended 5.4 per cent in positive territory. Swiss equities dragged Europe lower early on but led the region back as the week wore on. ABB, the Swiss-Swedish engineer bounced back sharply, as did insurer Swiss Re.

On Thursday, Spanish banks spearheaded a strong rally as news of the $30bn IMF bail-out package for Brazil, the biggest in the IMF history, eased worries of the sectors loan commitments to the troubled region. Santander Central Hispano, which owns Brazil&#39s third-biggest private bank Banespa, gained 8.2 per cent. Other companies with exposure to Brazil, namely Telefonica and Portugal Telecom which control&#39s Brazil&#39s biggest mobile carrier TCP, also performed well.

In the UK, a strong final couple of days powered the indices ahead, with the FTSE 100 gaining 6.1 per cent over the week.

Recommended

A consumer&#39s view

The recent landmark decision in the High Court, which found against the Inland Revenue when it tried to block an inheritance tax loophole, throws into sharp relief the urgent need for reform of IHT and the inherent unfairness of this tax.Perhaps the most disreputable aspect of this case is that there is no doubt that […]

It&#39s a crazy world where a working system is wrecked

Who on earth takes notice of reports which seem to gain additional credence by trying to change more and more of systems that have worked for the last 15-plus years?We hear that people who have not previously invested do not do so because of complicated products and the fact that advisers are paid commission – […]

State intervention not aiding market A consumer&#39s view

The growth of regulation and state intervention in financial services since 1986 has gone too far without obvious benefit to consumers, practitioners and companies.You should therefore beware the further extensions of state involvement contained in both the Sandler and Pickering reports.Much of both reports advocate the continuation of “softly, softly” state intervention and regulation into […]

Watson Wyatt wins Geest contract

Watson Wyatt has won the contract to supply pensions, actuarial and investment services to fresh food supplier Geest PLC.Geest, based in Peterborough, has operations in Europe and South Africa. It chose Watson Wyatt after a review carried out by its pensions advisers.Watson Wyatt managing consultant Graham Mitchell says he is delighted to have added another […]

Flexible reversionary trusts and estate planning

The suitability of different estate planning solutions will depend on the individual’s own circumstances, needs and objectives. When considering the different solutions available there is a trade-off between inheritance tax (IHT) efficiency and access. Overall a flexible reversionary trust provides a greater level of flexibility than a discounted gift trust and can offer individuals a […]

Newsletter

News and expert analysis straight to your inbox

Sign up

Comments

    Leave a comment

    Close

    Why register with Money Marketing ?

    Providing trusted insight for professional advisers.  Since 1985 Money Marketing has helped promote and analyse the financial adviser community in the UK and continues to be the trusted industry brand for independent insight and advice.

    News & analysis delivered directly to your inbox
    Register today to receive our range of news alerts including daily and weekly briefings

    Money Marketing Events
    Be the first to hear about our industry leading conferences, awards, roundtables and more.

    Research and insight
    Take part in and see the results of Money Marketing's flagship investigations into industry trends.

    Have your say
    Only registered users can post comments. As the voice of the adviser community, our content generates robust debate. Sign up today and make your voice heard.

    Register now

    Having problems?

    Contact us on +44 (0)20 7292 3712

    Lines are open Monday to Friday 9:00am -5.00pm

    Email: customerservices@moneymarketing.com