Stock market outlook bleak on third anniversary of tech bubble peak

www.canada.com Canadian Press Monday, March 10, 2003

TORONTO (CP) - Overseas stock markets were down and Wall Street index futures were weak Monday, on the third anniversary of the peak of the technology-stock craze and a week before the March 17 deadline envisioned by the United States in a proposed United Nations ultimatum to Iraq.

American State Secretary Colin Powell said he is close to rounding up the votes for the disarmament deadline, and warned that a French veto would have "a serious effect on bilateral relations."

European stock markets were down, on war worries and after Deutsche Telekom reported the worst corporate loss in European history.

Europe's largest telecommunications company said Monday it lost 24.6 billion euros ($27.1 billion US) in 2002. The net loss was largely on writedowns of such holdings as wireless company T-Mobile USA, but chief executive Kai-Uwe Ricke acknowledged: "There is no way to put a good face on it."

The Deutsche Telekom loss - reported on the third anniversary of the Nasdaq's technology-bubble peak - exceeded the records set last week by France Telecom, at 20.7 billion euros, immediately overshadowed by Vivendi Universal, which lost 23.3 billion euros last year.

The German DAX index was down 1.7 per cent early in the afternoon. The Paris CAC-40 declined 0.8 per cent, while London's FT-SE 100 index was little changed, slipping 3.4 points to 3,488.2

Asian stocks closed down. The key Nikkei index in Tokyo fell to a new 20-year low, down 101.86 points, or 1.25 per cent, to 8,042.26, led down by banks.

The Hong Kong Hang Seng index declined 45.23 points to 8,861.87.

South Korea's main index closed 0.33 per cent lower after North Korea test-fired a missile into the sea in what was seen as a move to raise tensions further over its nuclear programs.

The Canadian dollar was trading at 68.37 cents US, up 0.13 cent from Friday's 32½-month high, after gaining 0.85 cent last week.

The currency got an additional boost Monday morning as Canada Mortgage and Housing Corp. reported that housing starts last month were up 34.5 per cent over the January level.

The euro was solidly above its four-year highs of $1.10 US, while the yen strengthened to 116.5 to the American dollar amid fears that war will wound the already shaky American economy.

In Canadian corporate news, business software maker Cognos has announced an alliance with the Giuliani Group, a consulting firm headed by former New York mayor Rudolph Giuliani.

Canada's largest pension-fund manager, the Caisse de depot et placement du Quebec, reports Monday on what is believed to have been a bad year. Reports say the Caisse lost more than $2 billion on telecommunications investments last year, mostly on cable company Videotron.

Analysts suggest the fund lost $10 billion in 2002, out of $133 billion in assets. The fund's report precedes an expected