Shares took second place to commodities last week.
Oil surged to a 32-month high on Friday above $US126 a barrel in London on concerns about long-term supply cuts, higher interest rates in Europe and the possible shutdown of the US government.
That was postponed for a while, possibly just four days with another deadline due on Thursday of this week.
The euro rose to a 15-month peak against the US dollar and was the major influence on commodities.
The greenback’s weakness helped gold rise to a record high for a fourth straight day, silver sparkled, copper rose, as did cotton: it was game on for riskier investments across the world as investors ignored the negatives in droves.
The Reuters/Jefferies CRB index rose 8% in the first quarter and is up 2.6% so far in April, and hit its highest level since September 2008.
Portugal’s bailout could cost as much as 90 billion euros, with deeper cuts to be demanded of the country than it has been willing to offer so far.
So, ignoring Portugal, European shares hit a five-week closing high, but Wall Street stocks ended lower on concerns about the impact of higher energy costs on the economy.
Asian shares rose, despite China lifting rates and more worries in Japan, not mention those higher oil prices.
The MSCI main world equity index rose 0.5% and had its third weekly gain.
The index hit a new 33 month high on Friday and is now up 103% since the rebound started in March 2009.
Even emerging markets have rebounded strongly from the sell-off earlier this year and into March: they are up more than 11% from the lows of last month.
The interest rate hikes by China and the European Central Bank failed to cause investors to rethink their optimism, despite fears about inflation which saw gold, silver and other precious metals sought after for most of the week.
Boosted by Thursday’s European Central Bank rate hike, the euro rose to its highest since January 2010 and it finished up 1.7% on the day at $1.448383.
The surge in oil prices worried Wall Street, which fretted for most of the day before closing lower on Friday.
In the US the Dow lost 29.59 points, or 0.24%, to end at 12,379.90, the Standard & Poor’s 500 index was down 5.36 points, or 0.4%, at 1328.15 and The Nasdaq Composite Index was down 15.73 points, or 0.6%, at 2780.41.
For the week, the Dow rose 0.03% while the S&P 500 and Nasdaq each lost 0.3%.
The S&P 500 failed to go on with its run of the previous couple of weeks last week and recoiled once again from passing through and consolidating above 1,333.58 points which is double the low hit on March 9, 2009.
But the index has recouped all of the losses suffered in the wake of the March 11 quake and tsunami in Japan.
The Australian market will start a touch lower this morning after share price index futures fell 11 points in trading on Saturday.
That was after local shares ended up on Friday, giving a third positive week.
At the close, the benchmark ASX 200 index was up 32.5 points, or 0.7%, at 4940.6, while the All Ordinaries index climbed 31 points, or 0.6%, to 5036.5.
The market rose 1.6% for the week and has now risen in eight out of the last nine sessions.
But the real star was the Aussie dollar which jumped again on Friday night to hit a new high.
The dollar closed at $US1.0564 as investors chased it in the wake of the strong March jobs report.
The Australian dollar has set a fresh post-float high, having gained more than 1% over a third successive week, on the back of rising sharemarkets and expectations of higher interest rates.
The Australian dollar gained 1.4% over the week, after rising 1.2% last week and 3% the week before.
It’s now up more than 5% in the past three weeks.
In Europe the Stoxx Europe 600 Index rose 0.6% last week and has bounced 7.4% from the year’s low on March 16 (after the March 11 quake, tsunami and the Fukushima crisis).
In London the FTSE 100 rose 48.38, or 0.8%, on Friday to be up 0.8% for the week. The index has risen 5.1% in the previous two weeks.
Germany’s DAX index rose 0.5% last week to take the gain from March 16 to 11%.
European markets shook off after the Portugal bailout request and the 0.25% rise in rates announced by the European Central Bank.
In Asia the MSCI Asia Pacific Index rose 0.9% last week, driving it to its highest level since last month’s earthquake.
The index has risen for the past three weeks.
Hong Kong’s Hang Seng Index rose 2.5% last week, while China’s Shanghai Composite Index increased 2.1% (so much for the rate rise), Taiwan’s Taiex Index rose 2.2 % and Japan’s Nikkei 225 Stock Average gained 0.6%.
