Upbeat economic outlook offsets fallout from GM bankruptcy

Global stock markets began June on a strong note as a string of positive data releases on manufacturing activity in Asia and the US, which has rekindled hopes that the worst might be over for the world economy.

The week was also characterised by a rally in auto sector, which edged higher on optimism car makers would increase their market share following the collapse of General Motors.

In the US, the upbeat economic outlook has more than offset any negative effects of the bankruptcy of GM, which is the biggest-ever in the history of US manufacturing. In fact, it was largely outweighed by positive news in the US housing market and manufacturing.

European equities took a breather as the week ended with mixed results when banks across the continent were dragged down by Barclays. This happened after the government-owned Abu Dhabi International Petroleum Investment Company sold its stake of over 11% in the bank, reaping a $2.5 billion profit in just seven months.

In Asia, stocks were bolstered by positive economic data emanating from China particularly from manufacturing activity.

The unexpected rise in Australia's GDP in the first quarter also supported the week's rally, making the country the first industrialised nation to avoid the recession.

The Hang Seng increased 3.66% followed by Japan's Nikkei, which ended the week 2.58% higher.

This article has been prepared by Bank of Valletta plc, which is licensed to conduct investment services business by the MFSA, for your general information only. This information is not a solicitation or offer by the bank to acquire or sell securities, nor does it constitute any form of advice by the bank. Appropriate advice should be obtained before making any such decision. Past performance is not necessarily a guide to future performance and the value of your investments may fall or rise.