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It was another mixed week for global bourses with the FTSE World index managed to post a gain of 0.4 per cent. With most third-quarter corporate earnings reports out of the way, the main focus was on economic news and on which central bank would cut interest rates. The corresponding week last year saw a hat-trick of interest rate cuts, all at 50 basis points, by the Fed, the ECB, and the Bank of England. This was not the case last week.

In the US, a raft of weak economic data reported over previous weeks was enough to convince the Fed&#39s chairman Alan Greenspan to cut but the magnitude of the reduction, 50 basis points, surprised most economic commentators and investors who were expecting a 25bp drop in rates. At 1.25 per cent, the Fed rate is now at a 41-year low.

The last two sessions saw investors return their focus on corporate America. Shares in Cisco Systems were hit after the company forecast that current quarter sales would fall, McDonalds issued an earnings warning and General Electric chipped in with a negative note on GE Capital. Amid all this, the Dow still managed to eke out a fifth straight week of gains, ending 0.2 per cent higher. It was not so rosy for the S&P Composite and Nasdaq 100 which fell by 0.7 per cent and 1 per cent respectively.

It was a better week for UK markets. On Monday, the TMTs and financials spearheaded the FTSE 100&#39s advance, leading the index to a gain of over 3 per cent on the day. Much of this was given back over the week as the monetary policy committee left rates on hold at 4 per cent for the 12th consecutive month. The blue -hip index still managed to stay above the 4,000 level, posting a five-day gain of 0.9 per cent. There was better news for small and midcaps, which rose by 3.5 per cent and 1.7 per cent respectively.

In Europe, financial stocks slipped as the European Central Bank held eurozone interest rates at 3.25 per cent. The insurance sector was hardest hit, with a second blow coming from Dutch group Aegon, after it forecast a 35 per cent drop in 2002 earnings. In Germany, economic gloom was reinforced by confirmation of a bigger than expected rise in unemployment.


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