Global stocks rose on Friday, recording their best week in nearly a year, as risk aversion eased.
It was a reversal of the big slide the week before.
Reflecting the improved tone, copper, gold and oil led commodities higher, and US bond yields rose, with the 10 year security yielding 3.06% at the close, up from 3.02 on Thursday.
But Friday saw signs of the push higher slowing as the US dollar rose towards the end of trading against the euro, and other asset prices lost some of the momentum from the day before.
Nervousness remains over European bank stress tests and weakness in the US economy.
And after trading, US regulators revealed they had shut four more small US banks, taking to 90 the number closed so far in 2010.
World stocks, measured by the MSCI global index, rose almost every day in the past week, erasing the previous week’s losses.
The MSCI world equity index rose Friday by just over half a per cent to boost its weekly gain to 5.1% – the highest since the 6.6% increase recorded in the week ending July 18, 2009.
With the US second quarter earnings season getting underway this week, some investors bought the US dollar and gold late Friday.
At the close, the Australian market was up for the day and the week.
The futures market is tipping a small gain today.
The ASX200 index was up 39.4 points, or 0.9%, at 4396.3. The All Ordinaries index rose 40.4 points, or 0.9%, to 4414.5.
The market was up around 3.4% for the week.
On Wall Street trading was less confident as the day went on and there was a lack of bounce compared to Wednesday and Thursday.
The market rallied late in the afternoon, matching the buying in gold and the US dollar.
The Dow rose 59.04 points, or 0.58%, to end at 10,198.03, while the Standard & Poor’s 500 Index was up 7.71 points, or 0.7%, to finish at 1,077.96. The Nasdaq Composite Index added 21.05 points, or nearly 1%, to close at 2,196.45.
For the week, the Dow gained 512 points, or 5.3%. The S&P 500 rose 5.4% and the Nasdaq was up 5%.
Even with the gains of last week the S&P 500 is still down 11.5% from its most recent high in late April.
European markets were firm, with Britain’s FTSE 100 rising 0.5%, Germany’s DAX advancing 0.5% and France’s CAC 40 climbing 0.5% on the day.
The Stoxx 600 index rose 5.4% last week (although the rally slowed on Friday, as it did elsewhere).
The Stoxx 600 is now down 8.1% from this year’s high in April.
The FTSE 100 jumped 6.1% last week, Germany’s DAX rose 5% and France’s CAC 40 increased 6.2%. Spain’s IBEX 35 index surged 9.5%.
And Asian markets also rose rallied after South Korea raised its benchmark interest rate, seen as an optimistic sign for the economy.
On Friday, Japan’s Nikkei rose 0.5%, Hong Kong’s Hang Seng gained 1.6% and the Shanghai Composite rose 2.5%.
Over week, the MSCI Asia Pacific Index rose 4%. That left it still 3.6% under the year’s peak in April.
Japan’s Nikkei rose 4.1%, Taiwan’s market was up 4.3%, Hong Kong’s Hang Seng rose 2.4%, and Shanghai jumped 3.7%, as did Australia.
According to Bloomberg, that surge last week came on the back of heavy outflows from equity funds around the world as investors went to cash.
EPFR reported on Thursday that equity funds worldwide had outflows of more than $US11 billion in the first week of July, Bloomberg said.
Money market funds, considered as a safer investment alternative, received $US33.5 billion during the same week, their largest inflows in 18 months.
The euro fell against the US dollar as investors pocketed some proceeds from the rally that had taken the single currency to its highest level in more than two months.
Since the $US1.1877 June low, the euro is up around 6%.
It fell 0.4% Friday to end at $US1.2641.
The Australian dollar finished the week over 87.7 USc.
