For all the drama and tragedy surrounding the shooting down of MH17, financial markets ended the week in good shape.
In fact it was probably good news from China and the US which helped the markets end the week on an up note – and perhaps looking to go higher this week if the flow of solid earnings reports in the US, Asia and Europe continue.
The settling of European nerves about the health of its banks, especially in Portugal, and some better than expected earnings reports from US banks and other companies also helped calm twitchy markets on Friday.
Our market will start with a 22 point rise today on the share price futures contract, with the dollar up to close on 94 USc.
US shares gained 0.5% on the S&P 500, European shares rose 0.4%, Japanese shares rose 0.3%, Chinese shares added 0.6% and the Australian share market finished the week up 0.8%.
Oil prices ended the week higher, gold was lower and bond yields were also down amid a flight to quality rush on Thursday and Friday.
In New York on Friday the S&P 500 rose 20.1 points, or 1%, to 1,978.22.
The Dow jumped 123.37 points, or 0.7%, to 17,100.18, and the Nasdaq Composite ended up 68.70 points, or 1.6%, to 4,432.15, as biotech and Internet stocks rallied sharply, after steep drops the day before.
For the week, the Dow rose 0.9%, S&P 500 0.5% and the Nasdaq added 0.4%.
The Russell 2000 index, which tracks small caps on US markets fell 0.7% last week, after a fall the week before.
That’s left it 1% down for the year so far, a big contrast to the 6.1% rise for the Nasdaq, 7% for the S&P 500 and 3.2% for the Dow.
For some analysts the weakness in the Russell index is a sign small cap stocks are not following the bigger indexes higher, especially the S&P 500 and the Nasdaq.
Could that be an early warning bell of underlying weakness in US markets?
By the close early Saturday morning, the MSCI’s world index rose 0.5% and the pan-European FTSEurofirst 300 index eased 0.01% to close at 1,363.11 after being down as much as 1.7% earlier in the day.
In Europe, the Stoxx Europe 600 Index was little changed at 339.66 at the close in London. It rose 0.8 for the week.
Earlier in the day the MSCI Asia Pacific Index fell 0.3% to 146.79 on Friday, cutting the week’s rise to 0.6%.
In Australia on Friday the ASX 200 added 0.2%, overcoming an 0.7% fall in early trading on the news of the shooting down of MH17 and the sharp falls Thursday night in Europe and the US.
The 0.8% rise over the week was driven by rises in the prices of miners, especially the big iron ore companies which produced better than expected June quarter production reports (except BHP which reports this week).
Fortescue shares jumped 5.8%, Rio Tinto was up 3.5% and BHP’s shares were up 2.2% by the close on Friday.
Woodside shares ended up 1.8% over the week, boosted by Thursday’s solid June quarter and half year report, while Santos finished 1.1% higher, despite a fall on Friday after its better than expected June quarter and half year report was released.
Among the banks, the Commonwealth rose less than 0.1% to $81.27, the ANZ added 0.2% to $33.42 and the NAB was up 1.5%.
Westpac Banking Corporation lost 0.2% to $33.90, and Telstra jumped 1.9% to a 13 year high of $5.43.
