The losses were widespread, with every region losing ground. Only nine of the 48 country constituents of the FTSE All-World Index rose during the month, the index group reported.
The decline in the US dollar means that the performance of many markets was better in dollar rather than in local currency terms. In addition to the corporate problems, markets were depressed by fears about the health of the global economic recovery and by concerns about further terrorist attacks.
On the upside, Pakistan and India were two of the best five performers as border tensions between the two countries eased. In dollar terms, Pakistan rose by 6.91% and India by 2.93%
The Argentine market also rallied slightly after heavy losses earlier in the year in the wake of the currency devaluation and default. Argentina was up 5.65% in the Index.
On the downside, Turkey was the worst performing country, as fears about the health of the prime minister prompted concerns that the coalition government might collapse, taking the IMF-backed economic recovery program with it. That country turned in a -20.46% performance.
Brazil was the month’s other big casualty, with a -18.98% index reading. Investors fear that a left-wing victory in October’s presidential election might lead the country to debt default. In terms of the interest it has to pay on government debt, Brazil is now the second riskiest emerging market in the world, after Nigeria, according to FTSE officials.
In sector terms, the usual suspects bore the brunt of the selling pressure – information technology hardware,-16-9%; media, -16.1%; and telecoms, -11.1% were three of the five worst performers, according to FTSE.
Tobacco trumped everything else in negative territory at -17.6%, as the sector gave up some of the gains made earlier in the year. Only two sectors actually made money on the month – transport and forestry – but in each case the gains were only 0.3%.
At the individual stock level, there was a raft of disasters, FTSE said. Conexant Systems was the world’s worst performer, as its shares dropped out of the S&P 500 index after falling demand for its computer chips and modems. The accounting scandal at WorldCom battered shares in its Brazilian unit Embratel, and a revenue warning hurt shares of Lucent Technologies.
The best performing shares of the month were a varied group including an Italian bank, an Indonesian cement market and an Indian car and truck manufacturer.