Weekly Market Summary

by Raymond Chatlani

On Monday, Asian stockmarkets rocketed higher, buoyed by hopes of progress in resolving Europe's debt crisis and positive export figures from Japan that point toward a recovery from a devastating tsunami earlier this year. Japan's Finance Ministry said Monday that exports rose 2.4 percent in September compared with a year earlier, marking the second consecutive month of growth. European and US markets rose after European leaders achieved some progress in talks to fix the region's finances and as strong earnings from Caterpillar boosted investor sentiment.

On Tuesday, Asian stockmarkets mostly rose following Wall Street's performance last night. European markets fell after the cancellation of a meeting of European finance ministers raised doubts that an upcoming summit will result in a clear plan to rein in Europe's debt crisis. US markets fell after data showed consumer confidence tumbled to its lowest level since March 2009.

On Wednesday, Asian markets rose modestly as markets waited for news of whether a concrete plan to tackle the eurozone's debt crisis will emerge at an EU summit later today. European markets closed modestly lower as investors waited for the outcome of the EU summit. US stockmarkets rallied as Eurozone leaders sealed a three-part deal, which they hoped would convince markets that they have an effective response to the growing economic crisis.
Officials in Brussels said an accord had been reached with banks on a 50% write-off of 100bn euro of Greek debt and that banks would seek 106 Billion Euro to recapitalise their balance sheets. It was also agreed on Wednesday to increase the 440bn euro bailout fund, perhaps to over 1trn euro. This would help protect larger economies such as Italy and Spain from the market turmoil that has already pushed three countries to need bailouts.

On Thursday, Asian stockmarkets rose following the EU rescue plan. European markets exploded higher on the Eurozone debt agreement. Wall Street rose on strong volume followed the EU debt resolution programme.

On Friday, Asian markets rose having one of their best weeks in nearly three years after a long-awaited plan to resolve the European debt crisis sparked a huge relief rally in riskier assets. European and US stockmarkets closed flat after a strong rally on a long-awaited euro zone rescue deal, but a weak sale of Italian bonds showed investor confidence in the agreement was shaky.

This morning, Asian stockmarkets fell as the dollar spiked to a three-month high against the yen following Japan's intervention, prompting investors to book profits after last week's rally.

Last week, global equities and commodities surged as investors cheered an EU rescue plan to resolve the Eurozone's debt crisis. This three part rescue plan consists of private banks agreeing to accept a write-off of 50% on Greek bonds, seek 106 Billion Euro to recapitalise their balance sheets and that the the European Financial and Stability Fund would be boosted to 1 Trillion Euro from 440 Billion Euro. A report Thursday showed that the U.S. economy expanded at a solid 2.5 annual rate in the July-September quarter. That helped ease concerns that another recession might be nearing.

This week, traders will be cautious ahead of the Group of 20 leaders' meeting later on Thursday that will focus largely on the European debt crisis. Also, the markets are waiting for further details on the EU rescue plan and its implementation.

Also, this week, investors will shift their focus to U.S. economic data, which might temper their exuberance. Three events this week will command attention: the U.S. jobs report for October, the Federal Reserve's policy meeting and Fed Chairman Ben Bernanke's quarterly news conference