Markets globally rallied this week after European leaders agreed on a framework to solve the region's debt crisis. Markets were fueled by enthusiasm after the agreement to increase the European Regional rescue fund to 1 trillion euros was reached this week and as investors agreed to take a 50% voluntary haircut on Greek debt and as Chinese government promised to buy European bonds to build the rescue fund.
In the US, European news coupled with encouraging economic data propelled the major indices to strong gains for the week. The Dow gained for the 5th week running and added 3.6% for the week, S&P 500 and the Nasdaq both gained 3.8% for this week on better than expected consumer spending data for September. With just one day of trading left in the month, October is on track to be one of the best months for equities universally in this year as most markets are poised to post strong results for October after months of negative returns.
Canadian markets also soared on the same news that propelled the gains elsewhere. The TSX index gained 4.8% and the Venture index gained 6.3% for the week on strong performance from metals and mining sector. The European and Asian markets were also up with emerging markets performing especially well.
Commodities too had a good week. Copper was the biggest gainer with 15% increase in its price; silver also posted heavy gains with over 13% increase over last week’s price. Crude oil is gaining for the fourth week running, this week it gained 6.8% to finish at $93.32 for a barrel. Gold crossed the $1700 mark for the first time in 6 weeks; it added 6.8% over the week to finish at $1747.20 an ounce.