Weekly Market Summary

by Ryamond Chatlani

On Monday, Asian stockmarkets slipped on increasing tensions in Libya. European shares fell on Libyan worries. US markets were shut for President's Day, a public holiday.

On Tuesday, oil prices rose and Asia stock prices fell sharply as markets watched the growing crisis in Libya, with investors turning to safe haven gold which in turn pushed up silver to its highest level in 31 years. European and US stockmarkets fell as protests in Libya intensified although US consumer confidence hit a 3 year high.

On Wednesday, Asian stockmarkets extended losses on Libya's turmoil. European markets fell further as Qadhafi vowed to stay in power. US indices fell on a spike in the oil price.

On Thursday, Asian stockmarkets fell again as Brent oil topped $113 on Libyan unrest. European shares were hit by growth worries as crude continued to rally. American markets were mixed as applications for unemployment benefits dropped by 22,000 last week to a seasonally adjusted 391,000 which was the lowest level in more than two and a half years and as investors feared that climbing oil prices could derail the economic recovery.

This morning, Asian markets rebounded for the first time this week as crude prices slipped on rumours that Gadhafi has been killed. European and US stocks rebounded strongly as consumer sentiment rose to its highest level in 3 years and as Saudi Arabia raised oil output by 8 percent to 9 million barrels of oil a day to compensate for Libya.

After dictatorships fell in Tunisia and Egypt, it is now Libya's turn. Libya is a different case and will continue to affect the markets as it exports 1.1 million barrels of oil a day and a civil war has broken out. That is why global stockmarkets have been decimated this week.

American data this week is showing that the US economy is recovering where we saw that claims for unemployment benefits dropped to their lowest level in the last two and a half years and that consumer sentiment has recovered. If the Libyan problem gets resolved, markets should bounce back. Although Saudi Arabia have turned on the taps to compensate for the loss of Libyan production, this will only be useful for a short while. Markets should continue to fall should the civil war in Libya be prolonged.