Markets: Fifth Weekly Slump Around The Globe

Another rotten week for markets around the globe, with most notching a fifth week in a row in the red.

Driving much of the global slide has been the gathering belief that demand and output have peaked for the time being and growth will slow for much of the rest of the year.

The rising impact of austerity measures in Europe in particular and the ending of the stimulus in the US (government and Fed), plus the approaching brawl over the country's Federal debt ceiling, is driving more and money out of shares, commodities and property and other asset classes and into safe havens life the Swiss franc, US Treasuries and even Australian dollar assets.

Wall Street recorded its worst week since mid-August as weak job growth and the fears about the impact of the end of the Federal Reserve's stimulus program produced another round of losses.

May certainly lived up to the old adage 'Sell in May and go away' and June has started in the same vein with a 3% fall on Thursday and Friday.

Now the markets are down 5% from last month's high and half way toward the market's definition of a correction -- a 10% fall from a recent peak.

The sharp fall in bond yields (to 3% on Friday for the 10 year bond, down from around 3.69% earlier in the year) also points to a similar concern among investors.

But for the year so far, stocks still are positive, with the Dow up 5%, while the S&P 500 and the Nasdaq are each still up about 3%.

But another month of fears will see those gains wiped out.

The ECB meets this week, as does the Bank of England. Both are not expected to move interest rates, but the post meeting statement and press conference from the ECB will be closely watched for the timing of the next rate rise the markets are convinced is coming.

That's despite a small easing in EU inflation last month to 2.7% from 2.8%.

But it will be a nervy start to trading around the world today.

China has a public holiday today with considerable speculation that there could be another rate rise announced for that reason.

US shares ended lower on Saturday morning, our time, with the Dow down 97.29 points, or 0.8%, to close at 12,151.26.

For the week, shortened by last Monday's holiday, the index lost 2.3%, giving the index its longest weekly losing streak since July 2004.

The Standard & Poor's 500 Index shed 12.78 points, or 1% on Friday, to end at 1,300.16.

It was also down 2.3% for the week which was also the fifth down week, the longest weekly losing stretch since July of 2008.

And the Nasdaq Composite Index fell 1.5%, to close at 2,732.78, leaving the index also down 2.3% on the week.

In Australia, our market will open weaker today as a result of the falls on Wall Street.

Share Price Index futures fell 33 points to 4547 in trading overnight Friday, pointing to an extension of last week's slide when local shares open today.

At the close of physical trading on Friday afternoon, the ASX200 index was down 17.3 points, or 0.4%, at 4583.1, chalking up a loss of 2.2% for the week and completing its fifth weekly drop in the last six.

The All Ordinaries index fell 16.6 points, or 0.4%, to 4666.6.

The dollar, however, jumped back above $US1.07 in offshore trade, and was last buying $US1.0716, up from $US1.0674 at Friday's local close.

The close left the dollar unchanged on the previous week's finish of $US1.071 in New York.

The MSCI Asia-Pacific Index fell 0.3% to 133.98 this week, its fifth straight drop.

Japan's Nikkei Stock Average rose early on Friday, but lost ground to end the day down 0.7% at 9,492.21.

Hong Kong's Hang Seng Index finished down 1.3% at 22,949.5, but the Shanghai Composite closed with a 0.8% gain.

Japan's Stock Average fell 0.3% for the week; South Korea's Kospi index added 0.6% and Hong Kong's Hang Seng index slid 1.3%.

The Shanghai Index also finished higher over the week, up 0.7%, ending a four week losing streak.

Helping were the better than expected surveys of manufacturing for May.

Now for this week's flow of other economic data for May for China.

In Europe the Stoxx Europe 600 index trimmed its decline on Friday, but still closed down 0.4% at 273.67.

In Frankfurt, the German DAX 30 index closed up 0.5% at 7,109.03; while in Paris the CAC 40 index ended the day broadly flat at 3,890.68.

The FTSE 100 index closed up 0.1% at 5,855.01.

For the week, the Stoxx 600 lost 1.9% to 273.67, the biggest drop in almost two months.

The main index for European shares has retreated 3.6% over the past five weeks.

Greece's ASE Composite index surged near the end of trading on Friday to close 4.4% higher after the Greek Finance Ministry said a review of its implementation of reforms by the European Union, European Central Bank and International Monetary Fund concluded positively.

The Index rose 5.4% over the week.