By: Mike Campbell
Last week saw a substantial setback for the major stock markets on the back of continuing uncertainty on the Eurozone crisis and the inconclusive UK election. In Europe over the course of last week, the markets were mixed; the FTSE plummeted by 7.75%, closing at 5123 a level not seen since February; the Dax dropped by 6.9% ending the week at 5715.1, a level not seen since March. The CAC sank by 11% to end the session at 3392.6 the lowest level since I started preparing these reports last August. Presumably this disproportionate fall is due to the exposure of the French financial sector to Greek Portuguese and Spanish debt.
The Dow ended the week lower by 5.7%, finishing the trading session at 10380.4. The Nasdaq ended the week falling 8%, closing at 2265.6. The two markets have lost all of the gains made since late February.
The Nikkei fared no better, closing down by 6.3% over the course of the week ending trading at 10365, losing the gains it had made since early March.
On the currency markets last week, the Dollar was mixed against other major currencies. Against the Euro, the US currency rose by 4.3% over the course of the week, closing at 1.2746 to the Euro. The Greenback was stronger against the British Pound, rising by 4%, to close at 1.46835 to the Pound. However, the Dollar closed at 92.45 to the Yen, a loss of 2% on the week.
The Euro had a terrible week on the back of continuing uncertainty about the Greek debt situation and fears of it spreading. It fell by 6.3% against the Yen closing at 117.8. The Euro also fell against Sterling over the week by 0.3%. The loss was relatively small since Sterling is having its own crisis as a result of the inconclusive UK election. The close saw one £ buying 1.152€.
On the commodities market, the price for Brent crude fell sharply, closing at $78.27 per barrel (for June delivery); a fall of 10.5% over the course of the week’s trading. The value of gold strengthened; closing at 1200 $ per ounce, representing a gain of 2.9%.