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Investment brief

Most of the world&#39s equity markets paused for breath last week and although the latest economic data was generally positive, a distinct shortage of news on the corporate front resulted in many investors staying on the sidelines. By the end of the week, the FTSE World index had risen by 0.3 per cent, taking its gain since the start of the year to 23 per cent.

In the US, stocks ended lower in spite of data showing an improvement in consumer confidence and a bigger than expected rise in third-quarter gross domestic product, taking the number of positive quarterly readings to seven, the longest recovery since a nine-quarter run ended in 1997. However, by the end of the week, both the Dow Jones & S&P 500 were trading marginally lower while a late bout of profit-taking on Friday left the Nasdaq 2 per cent lower.

It was a rare week of outperformance for blue-chip stocks in the UK, with the FTSE 100 ending up by 0.5 per cent, its highest level in 15 months. Mid and small-cap stocks ended marginally lower, with the FTSE 250 falling by 0.9 per cent while the FTSE Small Cap index gave up 0.1 per cent. However, both the indices remain well ahead of the FTSE 100 since the start of the year.

In Europe, stocks ended marginally lower although still close to their best levels for the year, with Germany&#39s Dax index bucking the trend with a rise of 0.4 per cent taking its gain since the start of the year to over 31 per cent.

It was a poor week for the Japanese stockmarket, with the Nikkei 225 falling 4.3 per cent to a three-month low as investors continued to worry over the strength of the yen. Other Asian markets were also mostly lower although losses in the main were limited to less than 1 per cent.

Bond markets had a better week, recouping some recent losses. In the UK, the FTSE All Stocks index gained 0.7 per cent while in the US treasuries closed on a firm footing even though the continuing recovery in the global economy would appear to make a rise in US interest rates more likely. By the end of the week 10 year Treasuries were yielding 4.25 per cent while in the UK gilt yields of the same maturity fell to around the 5 per cent level.

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