Major stock markets across the globe strengthened as data pointed towards an improvement in the global economy. Trading was marked by a low turnover, reflecting the Labour Day holiday in the US.

Technology, media and telecommunications remained the areas of strengths as investors accumulated growth stocks. Last week, the US technology-heavy Nasdaq Composite Index jumped by 2.6 % while the ?old economy? Dow Jones Industrial Average gained 1.1%.

European markets benefited from improved investors? sentiments and the weakening of the Euro vis-à-vis the USD. Both the French and German bourses rose by 2.0 % during the week under review. British stocks ended the week in negative territory, despite experiencing a late rebound. British real estate stocks jumped following news of a potential bid for Canary Wharf. News that France Telecom may increase its stake in mobile telecom operator Orange also lifted the sector. Expectations of a strong second half of 2003 drove investors towards the export-oriented Asian economies. Japanese stocks shot up by 3.8 %, propelling the Nikkei-225 equity index rose above its psychological 10,000 points. Last week, Hong Kong stocks jumped by 1.3 %.

Eurozone : jump in new orders

On the economic front, the US Commerce Department reported that real GDP, the broadest measure of economic activity, grew by 3.1 % in the US in the second quarter, higher a the previous estimate of 2.4 % p.a.

This was mostly due to increases in consumer spending, outlays for defense spending and business spending on equipment and software. Moreover, latest data indicated that US Consumers continued to fuel the economic recovery in America for the month of July.

Personal spending, which accounts for about two-thirds of the US economic activity, rose 0.8 % in July, following an increase of 0.6 % in June. The housing market remained the bright spot as indicated by the 5.0 % sales of existing homes in July.

Analysts expect consumer spending to remain robust in the months ahead amid the 0.2 % increase in personal income for the month of July. Such news boosted interest for consumer cyclical (economic-sensitive) stocks. Shares of retailer Sears, home improvement chain Lowe?s and automaker General Motors gained 2.9 %, 3.8 % and 6.9 % respectively during the week under review.

Corporate America also witnessed some signs of encouragement from its manufacturing sector, which continued to expand. The latest reading from the Purchasing Management Association of Chicago?s index of business activity to 58.9 in August from 55.9 in July (a reading above 50 generally indicates expansion in the manufacturing sector). Moreover, new orders for durable goods also rose by 1.0 %, which is its third consecutive monthly increase. A survey carried out by the US Commerce Department revealed an upbeat outlook about business conditions for the next six months. Industrial concerns Ingersoll-Rand and Boeing rose by 4.1 % and 5.9 % respectively.

Signs of a pickup in capital spending in the US also boosted shares of European information technology (IT) services companies. These companies outperformed both the broad market and the US IT services sector by about 40 % since the beginning of 2003, according to brokerage house Merrill Lynch.

Last week, European IT services concern Cap Gemini jumped by 7.9%, benefiting from growing interest and a generally upbeat analysts? comment for the sector. News that the Eurozone manufacturers saw a jump in new orders for the first time in six months also supported the broad market.

Contribution by Confident Asset Management