Weekly Market Summary

by Raymond Chatlani

On Monday, Asian stockmarkets rose after strong jobs growth in the United States was seen as lifting the prospects for the global economy. European indices closed mixed and flat as major cross-border takeover activity provided support, notably Vivendi's purchase of Vodafone's stake in French mobile phone operator SFR for 7.75 billion euros although banks fell. US markets closed flat among an absence of catalysts.

On Tuesday, Asian stockmarkets fell modestly as Japan began dumping radioactive water from its crippled Fukushima Dai-Ichi nuclear station into the sea to give it room to store more highly contaminated water although markets in China, Hong Kong and Taiwan were closed for a holiday. European and US markets closed slightly lower in subdued trading as Moody's issued its second downgrade on Portugal in less than a month and as traders await this week's European Central Bank interest rate decision. Although China again took advantage of a national holiday to make a surprise 25-bp hike, the fourth in 12-months, silver set a new 31-year peak above $39/oz while gold surpassed the $1450 mark, touching $1456 in after-market trade.

On Wednesday, Asian stockmarkets edged higher calmed by signs of progress in Japan's battle to contain a nuclear crisis as its central bank meets to determine what measures are needed to help the country through its worst disaster since World War II. European shares rose as banks recovered from earlier session falls on the back of a successful Portuguese debt auction and brokers said there was long-term upside for key indexes in Europe. US markets rose modestly as bank shares gained. Later in the evening, Portugal followed Greece and Ireland in requesting an emergency bailout after the country's debts spiralled out of control. Gold temporarily hit a new high of $1,461 an ounce before retreating to $1,454 an ounce.

On Thursday, Asian stockmarkets closed flat on the news of Portugal's bailout and expectations of an ECB interest rate hike of 0.25% later today. European and US markets rose as fewer people applied for unemployment benefits last week in the USA and retailers reported stronger March sales than expected. However, all markets fell into the red at the close as Japan was hit by a massive 7.1 earthquake. Gold hit a new high of $1,466 an ounce with silver breeching $40 an ounce as the dollar weakened against the Euro as the ECB raised the base rate by a quarter percent to 1.25 percent and signalled it was ready to tighten policy further if needed to check rising prices.

On Friday, Asian stockmarkets inched higher as it appeared a strong aftershock in Japan's earthquake-ravaged northeast that hit U.S. and European markets had not done major damage. European markets rose on reassuring reports out of Japan as investors minds were put at ease following yesterday's late sell-off caused by Thursday's magnitude 7.1 aftershock. US indices fell as a spike in oil prices revived worries that inflation would derail the recovery, jolting a market that had been treading water ahead of corporate earnings. Gold hit another new high of over $1,470 an ounce with Silver breeching the $41 an ounce due to the weakening US Dollar.
World markets and commodities rose last week with gold hitting new highs and silver hitting 32 year highs as the US Dollar continued to fall against most cueencies especiaaly the Euro. U.S. crude hit its highest this year, driven largely by unrest in the Middle East. The Euro gained significantly last week as the ECB hiked interest rates by a quarter percent with more expected later this year.
Global indices rose because the US economy recovery keeps improving. In recent weeks we have seen strong and perhaps accelerating economic growth, good profit growth, fair valuations, momentum and high merger and acquisitions activity. But uncertainty arising from world trouble spots shows scant sign of abating and may contain stock prices. Also Ratings agencies warned of trouble ahead for debt-laden Ireland and Japan looked set for a long-haul in containing its nuclear crisis.