Last week's heavy share-price falls are tipped to persist, making September the worst month for most major stock markets in at least four years.

History of market crashes

On 19 October, 1987, the Dow lost 21% - its worst-ever one-day performance The 1929 Wall Street Crash saw US shares lose 85% of their value over five years Dow is currently 34% down from all-time high of January, 2000 Click here for more

Continuing uncertainty over possible war with Iraq, combined with a string of corporate results and economic data timetabled for this week, reinforce investors' antipathy for shares.

The week sees an unusually heavy barrage of reports from the sluggish US economy, including crucial labour and manufacturing data, consumer spending, car sales and factory orders.

Monday is also the end of the US third quarter-year, heralding the beginning of the next slew of corporate earnings reports.

Judging by some gloomy trading statements last week, including struggling tech giant JDS Uniphase, retailer Wal-Mart and cigarette maker Philip Morris, the results may not prove encouraging.

Nerves

The recent falls come amid fresh fears over the US economy, whose on-off recovery from recession is being watched by nervous investors around the world.

Modest indications of strength, such as persistently above-forecast inflation, persuaded the US Federal Reserve not to cut interest rates last week.

But corporate performance, the factor that ultimately drives share prices, has been far weaker than predicted, and influential brokerage houses have cut their ratings on blue-chip firms repeatedly over the past few days.

The possible war on Iraq has cast further uncertainty over sentiment, despite forecasts that an actual war would do little lasting harm to the global economy.

Since many large investors took their money out of shares in early summer, few will make the decision to return to the market until major uncertainties such as Iraq are eliminated.

Sad September

Even a strong stock market performance on Monday will do little to erase the memory of a dismal month.

Market panic has gripped Brazil

In the US, where share prices have fallen by some 10% since the end of August, September has proved the worst month since 1998.

In Europe, markets have performed even worse: Frankfurt's Dax, already among the weakest major share indexes in the world, lost more than one-fifth of its value, largely thanks to uncertainty over a troublingly close election result.

Germany is plagued by fears that its economy, having recovered from a recession late last year, is slipping back into stagnation - and the narrow re-election of Chancellor Gerhard Schroeder has dimmed hopes of major business-friendly reform.

The Dax has now lost almost half its value since the beginning of 2002, the worst performance of any index worldwide, including emerging markets.

Emerging jitters

The Dax's 21% fall has even exceeded the weakest emerging market, Brazil, whose Bovespa index has lost 16% since end-August.

Japan's market has held up well

Investors in Sao Paulo are nervous of next Sunday's elections, which currently look likely to return a socialist candidate, Luis Inacio Lula da Silva.

A troubled Brazil, by far Latin America's biggest financial market, has also pressured shares around the region.

Only in Asia, where share prices are traditionally less inclined to follow Wall Street, have the worst losses been avoided.

Tokyo's Nikkei index only lost a negligible amount during September, and is down just 7% this year in dollar terms, compared with a 25% average loss for rich-economy indexes.