A plethora of profit warnings and fear of further
attacks in October, were offset somewhat by rate cuts by
the Federal Reserve and the Bank of England.
Emerging markets recorded the strongest gains, with Pakistan increasing by 40% after receiving economic support following its decision to join the fight against terrorism.
Turkey, having battled to service its obligations earlier in the year, increased on the hope that its friendship with the US would bring economic benefits.
In the developed world, Finland performed best, buoyed by Nokia’s strong rebound. In contrast, Argentina performed worst on concerns that the country was close to default or devaluation.
Defensive in the Dumps
By sector, growth and cyclical stocks led the way as investors sought out companies, which would benefit most a possible rebound in 2002. IT hardware and electronics were the two best performers followed by automobiles.
Defensive plays, such as food producers, pharmaceuticals and beverages failed to shine in October, following their rally earlier in the year
The best performing individual stocks included the UK electronics group, Invensys, which rose 80% and the media group Granada, which rebounded from a slump caused by an advertising slowdown.
Among the worst performers were British Airways, suffering from the fall in demand for air travel in the aftermath of the attacks, while Germany’s Fresenius Medical care and Sweden’s Skanska dived following their profit warnings.