On Monday, Asian stocks slipped as concerns about the Middle East and higher energy prices weighed on equities. As a consequence, Gold hit a new all time high of $1,438 an ounce and silver hit a new 31 year high of $36.40 an ounce. Moody's slashed Greece's credit rating by three notches to B1 from Ba1 with a negative outlook, citing significant risks to the country's fiscal consolidation plan and risks of a debt restructuring. European equities fell on strong oil prices on mounting unrest in the Arab world. US stockmarkets fell as US Crude oil hit a two year high of $107 a barrel on Libyan instensified fighting.
On Tuesday, Asian stockmarkets rose although gains were capped by Middle East tensions. Most commodities retreated on a report that Gadhafi would give up power if he was offered safe passage. European and US markets rose as financial shares pushed stock indexes higher on signs that banks may soon raise their dividends.
On Wednesday, Asian stockmarkets rose as oil prices fell for a second day although investors remained on edge because of the turmoil in the Middle East. European and US markets fell as the fighting in Libya and worries that turmoil could erupt in other Arab countries continued to cast a shadow. Investors were also worried about the euro zone's sovereign debt problem after Portugal saw its cost for issuing two-year debt soar to its highest level since it joined the euro in 1999, rekindling fears Lisbon will need a bailout.
On Thursday, Asian shares edged lower, weighed down by worries that a surge in oil prices could exacerbate inflation pressures in the region and cripple economic growth and after surprisingly weak Chinese trade data hit markets. Latest data showed China swung to a surprise trade deficit in February of $7.3 billion (4.5 billion pounds), its largest in seven years, as the Lunar New Year holiday dealt a sharper blow to export activity than had been expected. European stockmarkets fell as Moody's cut Spain's sovereign debt rating one notch, warning of potential further cuts because it fears bank restructuring will likely cost more than twice what the government expects. US markets fell as investors absorbed a larger-than-expected increase in initial jobless claims, a surprise trade deficit in China and a downgrade to Spain's credit rating.
On Friday, Asian stockmarkets fell about 1 percent, extending their drop by more than 3 percent for the week as fresh outbreaks of violence in the Middle East kept markets on edge and on a major earthquake of magnitude 8.9 in Japan. European shares fell in sympathy with global markets. US stockmarkets rose on bargain hunting.
This morning, Asian developed stockmarkets fell while emerging markets rose and oil nursed losses after a massive earthquake in Japan sent investors scurrying to safe haven assets and raised concerns of falling demand for commodities.
With the civil war in Libya, the slashing of Greece's and Spain's credit ratings and the huge earthquake and tsunami in Japan, it is surprising that markets did not go down significantly last week. This is probably because we are seeing the US pulling out of recession.
This week we should see further weakness as there was a second nuclear explosion this morning in Japan and it is estimated that the damage caused by both the earthquake and tsunami will cost tens of billions in dollars to restore the infrastructure. This weakness may continue for a few weeks until next month where companies report earnings for the first quarter of this year.
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