STOCK MARKETS - THE WEEK REVIEWED

US stocks led a world decline in equity markets last week on worries that interest rates there will rise again, threatening growth in corporate profits. The Dow Jones Index fell more than 200 points on the week, or 3.1 per cent, erasing all of 1997's gains. The index is now nearly 600 points points below the all time high of 7111.72 set on 11 March. Chevron and IBM led the declines. Analysts said fund managers were taking profits in case the market was about to register more substantial falls.

In London, the FTSE-100 index fell 1.8 per cent in sympathy although the worst of the week's losses were erased by a rally on Friday. Stocks are expected to make little headway in the next month before the general election on 1 May.

In Germany the DAX index fell 5.7 per cent. The biggest declines were in Allianz, Lufthansa and RWE which all have substantial overseas earnings. Weaker German bonds also helped pull the equity market down, especially the banks and insurance companies which tend to hold large bond portfolios.

In Paris, the CAC 40 Index fell 5.2 per cent with oil company Elf Aquitaine registering the biggest losses, also rattled by the prospect of a rise in US interest rates. A survey of CAC companies that have reported earnings so far showed the average increase in profits was 29 per cent. Copyright: IOS & Bloomberg