Global Equities in Summer Slump

September 4, 2001 ( - Despite a series of interest rate cuts in markets around the world, global equity markets tumbled in August as the FTSE All-World Index dropped more than 4%, according to figures compiled by FTSE.

During the month, the US Federal Reserve, European Central Bank, Bank of England and Bank of Canada all moved to cut interest rates by a quarter of a percentage point but to little apparent purpose, at least in terms of resuscitating hopes for the global economy.

Phone Home

The worst performing market in the month was Finland, laid low by its high level of exposure to the mobile phone industry, an exposure that in better times stood the Helsinki bourse in good stead. In dollar terms, Finland tumbled more than 23% during the month, and an even steeper 26.15% in local currency terms, according to FTSE.

The slumping global economy weighed Hong Kong down more than 10%, making it the second-worst performing market for the month. Brazil slid nearly 10%, while China and Germany were off more than 7% to round out the bottom five performers.

Little Impact

The Thai market was August’s best performer, jumping 20% in dollar terms, lifted by talk that the Bangkok government might move to support share prices. However, that recovery, alongside the 7.6% in Egypt, the near 7% gain in Peru and the 6.37% in Morocco, is unlikely to inspire the sentiments of global investors.

FTSE said the five best performing sectors for the month were:

  • 9.50% – Forestry and paper
  • 2.79% – mining
  • 2.66% – tobacco
  • 2.62% – health
  • 0.49% – real estate.

The worst performing sectors were:

  • Information technology hardware (-22.90%)
  • Telecommunication services (-15.57%)
  • Aerospace and defense (-10.74%)
  • Automobiles (-10.70%)
  • Software and computer services (-10.02%).