GLOBAL – The recent terrorist attacks in New York helped pile on the misery last month for global equity markets, according to index provider FTSE, who says that its All-World Index fell in September by more than 9%.
FTSE says that the markets were already depressed and that trading slumped sharply when the new York stock exchange reopened after a four day intermittent closure. There was, however, a rally in the last week of the month.
Three small markets showed improvements – Peru, Venezuela and Finland, whilst Turkey and Argentina came off worst, as they were already perceived to be risky with well publicised debt problems, FTSE claims.
In times of crisis, FTSE believes that investors “instinctively” look for safe havens, evidence of which emerged in the performance of mainly defensive European sectors, such as pharmaceuticals, tobacco and beverages. FTSE also highlights the surge in the purchase of mobile telephones after the attack, prompting a particularly good performance by telecoms, which, given Nokia’s influence, helps explain Finland’s relative strength.
Automobiles and household goods are the worst performing sectors, according to FTSE, since consumer confidence goes down in times of crisis. The airline industry is also likely to suffer.
FTSE says that EMI reported that the economic slowdown was having an adverse effect on the music business.