Weekly market review around the world: 12 – 16 May
Most global equity markets had an excellent week, rising to levels not seen for several months amid signs that greater risk appetite was returning to markets. Developed markets generally rose by around 2 to 3 percent, while higher gains still were seen in emerging markets.12 – 16 May
Concerns about inflationary pressure in the Eurozone was not enough to dampen equity markets as Germany’s Dax rose by 2.2 percent over the week, while France’s CAC 40 was up by 2.4 percent.
Despite more negative economic data (poor manufacturing, housing and employment numbers), the S&P rose by 2.7 percent over the week, while the Dow Jones was up by 1.9 percent. The Nasdaq saw a gain of 3.4 percent.
Japanese markets enjoyed relatively strong gains over the week. The Topix was up by 4.0 percent and the Nikkei 225 rose by 4.1 percent.
In the UK, The Bank of England warned that inflation was running at around 3 percent. Against this backdrop, the FTSE 100 rose by 1.6 percent over the week, while the FTSE All-Share was up by 1.4 percent.
Asia & Developing Markets
Asian equity markets generally enjoyed solid gains. Hong Kong’s Hang Seng rose by 2.2 percent, while the Hong Kong China Enterprises index of Chinese stocks listed in Hong Kong was up by 3.8 percent.
Taiwan’s market rose by 4.6 percent, while South Korea’s market was up by 3.6 percent and India’s Sensex gained 4.2 percent.
Latin American equities enjoyed another broadly positive week, with Brazil’s Bovespa rising by 4.5 percent and Mexico’s Bolsa up by 2.7 percent. Russia’s RTS index enjoyed particularly strong gains, rising by 8.5 percent.
Investors seem to be reacting to increasing speculation that one of President-elect Medvedev’s priorities will be reducing the tax burden on the oil industry.
With increasing inflation concerns, government bond yields trended higher, with yields rising most sharply in continental Europe and the UK.
In currency markets, the US dollar continued to rise slightly higher.
Metals and oil broadly retained their previous peaks, without moving significantly higher. Gold was a beneficiary of the increased inflation concerns, ending the week above USD 900 per troy ounce.
This commentary was compiled with the assistance of BlackRock, one of the world’s leading investment management groups. For further information, or to discuss how current global economic conditions are affecting your investments, please feel free to contact Craig Welsh at Spectrum IFA Group or visit www.expatfinance.nl