World Markets Stumble into 2002

The FTSE All World index fell by nearly 3% in US dollar terms, investors remaining concerned about corporate profits in the wake of the Enron debacle, and central banks’ decision to hold interest rates steady.

According to the index provider, the month’s worst performer was Argentina, which, after teetering on the brink of defaulting on its debt and eventually abandoning its currency peg, fell 27% in dollar terms.
 
At the other extreme, Pakistan was up 32%, boosted by lower interest rates, a stronger currency and supportive comments from the International Monetary fund. Indonesia increased by almost 24% on a more positive political outlook.

Also in Asia, the Philippines’ market was up by 19% and Thailand by 18% buoyed by investors’ expectations that an export driven recovery is underway.

By sector, the world’s mining industry performed best, followed by tobacco stocks, resilient, thanks to its market’s inelastic demand, and aerospace and defense, boosted by the US’s current foreign policy.

Diversified Industrials lost 10.6% over the month, making it the worst performing industry sector, followed by the ever-volatile telecommunications sector, which lost 9.78%, as risk-appetite declined.

The month’s worst-performing stocks were Global Crossing and K-mart, which lost 100% and 72.71% following their Chapter 11 bankruptcy filings. UK telecom group Energis was the third worst performer, losing 69.84%.