It was the most turbulent week on the international markets for some time, although Dublin remained relatively unscathed. The 10th anniversary of Black Monday put world markets in a nervous mood at the start of the week and this, combined with confusing signals about EMU by British Chancellor of the Exchequer, Mr Gordon Brown, meant markets trembled in London. London soon regained its poise and even Wall Street began to come back, led by companies like AT&T which reported better than expected profits.
However, early in the week, the signals from the Far East that were to shake the market severely began to show. A fall of almost 5 per cent in Hong Kong on Monday stretched everyone's nerves. This was followed by a 4.4 per cent fall on Tuesday. Meanwhile the currencies of Thailand, South Korea and Taiwan hit record lows against the dollar.
In London, stocks with close trading links to these Asian countries took a nosedive. However, sterling benefited once more from the ambiguity over EMU and moved up two pfennigs against the deutschmark. In reaction, the pound dropped below 90p sterling on foreign exchange markets.
By the middle of the week the scene was set, as Hong Kong stocks suffered their heaviest one-day loss for years, as investors lost faith and pulled out.
The admission by the chief executive of Hong Kong, Mr Tung Chee-hwa, that interest rates might have to go up seemed only to fuel further speculation, although the market was calmer yesterday.
The reaction in Dublin was muted, with no significant selling. It was a surprisingly quiet week on the Dublin market , where the performance of AIB's United States subsidiary, First Maryland Bankcorp, was one of the main features of the week.
The 56 per cent rise in pretax profits was expected by the markets, with most of this explained by the acquisition of Dauphin.
With the fall of the FTSE, industrial shares weakened, with CRH worst-hit, dropping 10p to 815p on Thursday. Smurfit dropped 4p and Avonmore/Waterford dropped 3p, as rumours of difficulties securing a redundancy package spread.
Dublin dealers will nervously watch international markets over the weekend, with the feeling that more sharp ups and downs may be on the way. The US market was volatile again late yesterday and while Hong Kong was more stable, analysts fear that more upheaval in the Far East may lie ahead. Meanwhile, a speech by US Federal Reserve chairman Mr Alan Greenspan and a British government statement on the single European currency provide key areas of market focus in the coming week.
The British parliament reopens in London and Mr Brown will make a statement on European monetary union on Monday, but he is expected only to reiterate that it is unlikely that Britain will join the single currency in the first wave in 1999.
The main focus will be on Wednesday when Mr Greenspan is due to discuss the US economic outlook and monetary policy at a Joint Economic Committee of Congress .
