A week is a long time in the stock market, Monday brought ‘Black Monday’ in China followed by wiled daily swings. By Friday morning equities in the US, Europe and the UK were above where they started the week.
Shares in London were this morning little changed ahead of the Bank Holiday weekend after the strong recovery yesterday when the FTSE 100 rose by more than 3.5%.
Yesterday’s recovery on the Chinese markets continued and its main index, the Shanghai Composite, closed 4.8% higher following liquidity injections into the banking system and expectations of additional infrastructure spending.
During the week as a whole the Shanghai Composite has fallen over 7% and the authorities in China are investigating what has been described in the local media as “malicious short-selling’.
Following wild swings early in the week financial markets are currently in the process of healing from this month’s fireworks and volatility is coming down.
Underpinning the improvement in the market was a sharp upward revision to US second-quarter GDP growth to an annual pace of 3.7% from an estimated 2.3%. Anyone who thought on Monday that the economy was in trouble and sold was left looking silly on Friday following the strong GDP figures.
The dollar was broadly flat against the euro and lost 0.11% against the yen but climbed 0.38% against the pound, while gold futures rose 0.25% to $1,125.40.
Oil prices, which soared to their biggest one-day gain since 2009 on Thursday rising 10.3%, rose another 5.2% on Friday taking it back above $50 a barrel for the first time in three weeks. Back on Monday, it fell to a six-year low of $42.23.
Gold prices ended trading at $1134 per ounce on Friday in London, showing a weekly drop after 3 weeks of gains as Asian shares rallied on upbeat U.S. economic growth data following a chaotic week starting with the Chinese Black Monday.