THE markets got off to a bad start this week following the latest horrific plane crash in New York.

Despite the obvious shocking casualties, there was relief that the crash was being blamed on an accident rather than a further act of terrorism.

This resulted in the markets recovering all the losses of the previous day.

Also, the latest developments in Afghanistan have raised hopes of an earlier than expected end to the war, which helped boost the markets.

Many analysts and fund managers are trying to regain investor confidence by predicting that equity prices will start to recover.

The Bank of England has said the recent interest rate cuts should offset the worst of the global slowdown and the UK is on track to avoid recession.

In the Bank's latest inflation report, it said UK growth would fall next year but should rebound in 2003 and there is little risk of inflation going above the 2.5 per cent target. Sir Edward George, the Governor of the Bank of England, has also said the Monetary Policy Committee was ready to cut rates again if the slowdown worsens.

On the results front this week, various telecom companies have posted their figures, with Marconi and Vodafone revealing combined losses of a staggering £14 billion. Vodafone announced a pre-tax loss of £8.45 billion, which broke City records.

This included huge writedown charges of £4.8 billion following their various acquisitions at massively inflated prices during the telecoms and technology boom in 1999 and 2000.

Fortunately, the majority of its acquisitions were made with Vodafone shares instead of cash, which were also at an inflated price.

Therefore these writedowns do not affect the company's cash and ability to pay dividends.

Turnover increased 27 per cent to £8.9 billion and the figures showed improved profit margin and cash flow generation.

Average revenue per user has stabilised after years of decline and Chief Executive Sir Christopher Gent said the results were excellent. He also expressed confidence in the new 3G mobile services. Its shares have risen well since.

Marconi, on the other hand, revealed first half pre-tax losses of £5.1 billion and that sales of its core business have slumped 25 per cent to £1.6 billion.