Investing October 1, 2001

FTSE Falls 9.2% in Month of Terror Attacks

October 1, 2001 (PLANSPONSOR.com) - The All-World FTSE Index fell by 9.2% in September in the wake of the terrorist attacks on New York and Washington, which wreaked havoc on an already shaky equity market.

Reported by

Camilla Klein

T he attacks, hitting the heart of the financial district, prompted a four-day closure of US financial markets. On reopening, markets sank but rebounded at the close of the month.

Smaller Markets, Bigger Returns

Only three markets gained ground: Peru, Venezuela and Finland. Among the worst hit were those already weakened by structural problems, particularly Turkey and Argentina, which struggle with external debt financing.

Investors fled to traditional safe havens, supporting returns in defensive sectors such as tobacco, pharmaceuticals and beverages.

Telecom services also increased, buoyed by a surge in purchases of cellular phones prompted by the attacks. Indeed, three of the five best performing stocks this month were telecom companies, while pharmaceutical stocks took the two remaining spots.

The worst performing sectors this month included household goods and automobiles, which experienced a reduction in demand following the terrorist attacks.