Weekend markets: Stocks recover but for how long?

Blue chip stocks fell the most on Wall Street last week in nearly three years.

Fears of a Greek debt default and the US economy falling back into recession weighed most on investors’ minds.

In Europe, weekend meetings discussed options to maximise the size of a bailout fund that could provide trillions of dollars to rescue governments and banks – but only if all 17 euro-zone legislatures approve it.

An outcome is far from certain as German taxpayers, for one, could block the plan.

The annual meeting of the International Monetary Fund in Washington DC tried to sound united and engaged in their latest effort to assuage financial market concerns about European sovereign debt and the region’s fragile banks.

“Today we agreed to act decisively to tackle the dangers confronting the global economy,” the financial leaders said in their latest effort. They said Europe would do “whatever is necessary” to resolve the crisis.

In currency markets, the euro recovered losses while in commodity markets, gold and oil traded sharply lower.

On Wall Street, stocks ended the week slightly higher on Friday after a two-day slump that took the Dow Jones Industrial Index down 6.4% for the week, its worst performance since the week ended October 10, 2008.

The Dow, which plunged 674.83 points on Wednesday and Thursday, suffered the sixth largest weekly point drop in its 115-year history. The index has also dropped in seven of the last nine weeks.

The Nasdaq Composite rose 1.1%, to 2483.23, snapping a four-day losing streak but dropping 5.3% for the week.

The S&P 500 index rose 0.6%, to 1136.43, on Friday, led higher by consumer-discretionary, financial and technology stocks. It finished the week down 6.5%,

Other markets: Europe stabilises, Asia lower
European stocks ended last week with moderate gains. The Stoxx Europe 600 erased earlier losses to finish 0.6% higher at 216.19.

In Paris, the CAC 40 index erased losses to end 1% higher at 2810.11, the German DAX 30 index rose 0.6% to 5196.56 and in London, the FTSE 100 index rose 0.5% to 5066.81, a reversal after dipping below 5000 at one point.

Asian stocks ended the week mostly lower in choppy trade, Australia's S&P/ASX 200 index ended down 1.6% at 3903.20 after briefly trading in positive territory, while Korea's Kospi lost 5.7% to end at 1697.44.

Hong Kong's Hang Seng Index ended down 1.4% at 17,668.83, after trading down as much as 3%, and the Shanghai Composite Index was 0.4% lower at 2433.16. India's Sensex was down 1.2%. Japan's markets were closed for a holiday.

In the coming week, while developments in the US and Europe are likely to hold sway, some important data from Japan and China may also have significant impact on the region’s shares.

Commodities: Oil, gold slump
Oil prices settled below $US80 a barrel after falling to six-week lows, The October contract settled at $US79.96 in New York

Gold futures dropped 5.8% on Friday, the biggest one-day loss in five years, settling at $US1637.50 an ounce, down 9.6% for the week.

Currencies: Euro recovers
The euro was at $1.3506 compared with $1.3463 late on Thursday and was at ¥103.52 from ¥102.64.

The dollar traded at ¥76.68 compared with ¥76.24. The UK pound was at $1.5476 from $1.5344, while the dollar bought 0.9055 Swiss franc from 0.9086 franc.

The Australian dollar recovered from early weakness, trading at 97.68USc from 97.44USc.