It was a mixed week for the major financial markets. Most closed the week lower after a number of difficult sessions saw attention switch from the successes in Iraq to the state of the global economy. By close of play on Friday, the benchmark FTSE World index had fallen by 0.5 per cent. However, European markets bucked the downward trend, with the FTSE Eurotop 300 index edging up by 0.5 per cent.
In the US, the Dow surged ahead by more than 200 points early on Monday but most of these gains were given back later that day on concerns raised by the previous week's poor economic data. There was some buying on Friday on the back of unexpected positive retail sales figures but the gains generated and more, were lost as investors took the opportunity to bank profits. Volumes were generally thin throughout the week as institutional investors remained on the sidelines awaiting first-quarter results. Over the five days, the Dow, S&P 500 & Nasdaq 100 lost 0.9, 1.2 & 2.3 per cent respectively.
European markets continued on their winning ways, supported predominantly by strong performance from the insurers and the banks. Swiss Life's shares rose sharply on Tuesday after an encouraging statement on prospects for the year ahead. Bullish broker notes helped Credit Suisse and UBS. Germany's Munich Re also benefited from an upgrade from Goldman Sachs at the end of the week. German pharmaceutical and chemical group Bayer chipped in as shares rose after an out-of-court settlement. The Dax closed 3 per cent higher.
In the UK, Wednesday's Budget provided some modest support for the housebuilding sector as stamp duty was left unchanged. But the Chancellor's downgrading of UK growth forecasts served as a reminder of the weakening economy. The FTSE index declined by 0.2 per cent while the smaller-capitalised indices which have lagged in recent weeks made up some ground, with the FTSE 250 & FTSE Smallcap gaining 2.3 and 2 per cent.
Heavy selling by pension funds and concerns about global demand rounded off four consecutive days of declines to send Japanese blue chips lower and the Nikkei 225 to fresh 20-year lows.