Bears continue to roar as European markets slump for a third year

EUROPEAN shares have been on the rack for three successive years and are on course to lose almost a third of their value in the last year alone, indicating the bear market has accelerated.

As a result investors are approaching the new year bloodied and bruised. But many analysts and investors are optimistic the three-year bear market will be halted in 2003, although worries about a war in Iraq and the outlook for company profits could delay any rebound until later in the year. “There are so many big question marks about the beginning of next year in Europe,” said Amanda Forsyth, a fund manager at Standard Life Investments.

“In the first half of the year we are up against quite a lot of things. We do have a war looming... the market’s going to struggle with a high oil price,” said Forsyth, adding sky-high oil prices could trigger inflation and stifle growth.