World Markets Still Shaken and Stirred

July 2, 2001 ( - A slew of profit warnings, lukewarm economic data and growth concerns in developed markets weighed heavily on global markets in June.

Over the month, returns were negative across most regions, with the exception of markets in Asia where the FTSE Asean index climbed almost 4% in US dollar terms, thanks to Indonesia, which increased by 5.6% and Malaysia, up by 3.7%. Elsewhere, the FTSE All-World Asia Pacific Ex-Japan lifted by less than 1%.

Finland Falls

Finland was this month?s worst performer after profit warnings from Nokia, the largest component of its index, sent the index tumbling down by 19.14% and dragging the Nordic index down by 9%. On the other hand, Peru was June?s top performer, its index increasing by 9.7% over the month.

Mediterranean countries also experienced heavy losses, with Greece falling 12.4%, Portugal down by 8.2% and Spain receding by 7.1%.

New economy stocks continued to suffer amid a steady stream of profit warnings, with the IT Hardware sector falling by 17.7%, the Software and Computer Services sector down by 12.6% and the Telecommunication Services sector falling by 10.5%, pulled down by KPN, the Dutch telecom group, which fell by 39.3% and the UK?s Colt Telecom, which lost a third of its value.

Defensive Plays

On the other hand, defensive plays in Diversified Industrials, which increased by 5.6%, Food Producers and Processors, up 5%, and the Life Assurance sector, which increased by 3.3%, boosted by a 14.7% return from Royal & Sun Alliance Insurance, came out on top.

Investors traded their technology stocks for pharmaceuticals this month, boosting Belgian drugs and chemicals manufacturer UCB?s stock to a 17.6% return, June’s top performer and Altana, the German drugs group, which rose 16.3%, also benefiting from the news that the US Food and Drug Administration’s extended approval of its gastrointestinal drug.