July Markets in Doldrums – FTSE

August 6, 2001 (PLANSPONSOR.com) - Returns were negative nearly across the board in July amid increasing concerns on the direction of the global economy, according to data from index-group FTSE.

Argentina, on the brink of default faired worst, falling 22% in US dollar terms as investors, fearing a recurrence of a liquidity crisis similar to that recently observed in Turkey, fled the market in droves.

Emerging markets in other areas were affected by contagion, and beaten lower by increased risk aversion and fears of a recession. In China, the market fell by 15.9%, closely followed by Turkey, which tumbled 15.4%.

Elsewhere, markets in Emerging Europe lost 10% of their value, making the region July?s worst performer.

Ambivalent Asia

And in Asia, Singapore, one of the previous month?s better performers, released data showing that the city-state had slipped into a recession in the first half of 2001.

The gloom lifted slightly in Indonesia, which after months of political turbulence saw the market lift by 24.3% following President Wahid?s departure from office. Malaysia also performed well in July – the equity market lifted 12.2% by bargain-hunters.

By Sector

On a sector basis, technology performed poorly once again, with new economy stocks taking three of the bottom five slots, specifically,

  • electronic and electrical equipment, which fell by 11%
  • information and technology hardware, which fell be 9.7%
  • software and computer services, which dropped by 9.6%

In addition, the mining sector fell by 11.3%, while returns across the investment company sector fell by 8.7%

In contrast, the month?s better performing sectors were:

  • personal care and household products, up by 6.3%,
  • the transport sector, which rose by 3.38%, and
  • diversified industrials, which increased by 1.9%.

By Stock

Marconi was the worst performing share in the FTSE Eurotop 300, dropping by 61.3% following the suspension of its shares ahead of a profit warning. South Africa’s Dimension Data fell by a massive 52%, and Invensys PLC tumbled by 38.4%.

The month’s better performers were Dampskin Svenborg, Sky Broadcasing and Fiat, which increased by 14.8%, 13% and 12.6% respectively.