Stocks may suffer in winds of war

Europe’s stock rally may stall next week over concerns about insurers’ cash holdings, while investors remain on high alert as war in Iraq progresses.

Stocks across Europe rallied before the war, with investors betting that early progress by US-led forces would lead to a swift conclusion, leaving the teetering global economy intact.

Germany’s DAX index and France’s CAC-40 index have both climbed around 20% since March 12, while Britain’s FTSE 100 benchmark index gained 18% as investors mopped up trashed financials and tech stocks.