London: Global markets were flat on Friday in subdued holiday weekend trading after growing hopes of a global economic recovery propelled shares over 11% in the previous month.
Trading was thin with markets around the world closed on Friday for a holiday - Japan and London markets close on Monday - but sentiment remained supported by encouraging data from Asian export powerhouses China and South Korea.
“Expect a thin trading session today as traders trim their positions ahead of the bank holiday on Monday ... Investors will ask whether the recent gains are sustainable,” said Manoj Ladwa, a senior trader at ETX Capital in London.
The MSCI world equity index, which ended April with the biggest monthly gain in its 20-year history, was down 0.02% by 2:50pm.
The pan-European FTSEurofirst 300 index eased 0.1% after hitting their highest in over four momths in the previous session while emerging shares were 0.02% firmer, hovering at their highest since mid-October.
A hopeful note sounded by the Federal Reserve on the hard-hit US economy helped investors overcome fears over the economic impact of the spread of influenza A, widely known as swine flu.
Investors took note of US auto giant Chrysler’s bankruptcy filing on Thursday but also focused on cheerier economic news, including a smaller-than-expected drop in South Korean exports in April and a monthly survey of Chinese manufacturing suggesting an improving outlook.
Optimism that the global downturn may have seen its worst was also spurred by the fall in the number of US jobless claims, which indicated that the pace of layoffs was easing.
However, April factory survey figures expected from the US Institute for Supply Management (ISM) at 7:30pm, will provide further clues to the health of the world’s biggest economy while the release of results of US stress tests on banks next week will reveal the state of the global financial system.
Growing investor appetite for higher-yielding assets kept up the pressure on the dollar, pushing the unit 0.1 percent lower against a basket of major currencies.
U.S. crude oil stayed above $50 a barrel, reversing previous session gains while emerging sovereign market spreads traded 1 basis points wider at 530 bps above U.S. Treasuries. The June Bund futures traded down 28 ticks.