Global peers lag with returns of 26-42% in the last 2 months.
The breadth of rally from the March lows has improved as more indices across the globe participated in the market recovery.
The Hang Seng index of Hong Kong and the Straits Times Index of Singapore have risen by over 50 per cent, thereby outperforming indices across the globe. Indices in India, Indonesia and Taiwan have not been laggards either, gaining more than 45 per cent from their March 9 levels.
However, the US and European indices, though started well after March 9, have been moving sideways in the last couple of weeks. No wonder that the US and European benchmark indices have underperformed their Asian peers. Among the American markets, Mexico’s Bolsa Index has shown some strength with 42 per cent gains while Brazil’s Bovespa Stock index has gained around 40 per cent.
| WORLD INDICES AT A GLANCE | ||||
| 9-Mar-09 | 8-May-09 | Change | % Chg | |
| Asia/Pacific | ||||
| Straits Times | 1456.95 | 2238.21 | 781.26 | 53.62 |
| Hang Seng | 11344.58 | 17389.87 | 6045.29 | 53.29 |
| Sensex | 8160.40 | 11876.43 | 3716.03 | 45.54 |
| Jakarta Composite | 1286.69 | 1862.53 | 575.84 | 44.75 |
| Taiwan Taiex | 4628.24 | 6583.87 | 1955.63 | 42.25 |
| US | ||||
| Mexico Bolsa | 16964.36 | 24085.58 | 7121.22 | 41.98 |
| S&P 500 | 676.53 | 929.23 | 252.70 | 37.35 |
| Nasdaq Composite | 1268.64 | 1739.00 | 470.36 | 37.08 |
| Dow Jones | 6547.05 | 8574.65 | 2027.60 | 30.97 |
| Europe | ||||
| IBEX 35 | 6817.40 | 9408.10 | 2590.70 | 38.00 |
| DAX | 3692.03 | 4913.90 | 1221.87 | 33.09 |
| CAC 40 | 2519.29 | 3312.59 | 793.30 | 31.49 |
| FTSE 100 | 3542.40 | 4462.09 | 919.69 | 25.96 |
While the S&P 500 index and the Nasdaq Composite index have risen by 37 per cent, the Dow Jones Industrial has gone up by 31 per cent. Among European indices, the Ibex 35 of Spain has gained 38 per cent, followed by the Dax of Germany up 33 per cent and the CAC of Canada up 31.5 per cent.
However, the FTSE-100 of the UK was the laggard, up 26 per cent. The markets are expected to rise further as the global benchmark indices have shown upward breakouts.
According to Merrill Lynch Research, the MSCI Emerging Markets Index, the Shanghai Composite (China) and the Kospi (Korea) have provided leadership to the global rally off their early March lows. In fact, all the three have formed a series of higher lows off their October, November and March lows. Indices making higher highs and lower lows are considered to be bullish.
In Asia, the Nikkei 225 (Japan), the Hang Seng (Hong Kong) and the Straits Times Index (Singapore) are building potential double bottoms. Upside breakouts in short to medium term are still required to go past through higher levels of resistance. The BSE 500 Index (India), the Bovespa (Brazil), and the MSCI Malaysia Index have also rallied with the BSE 500 making a double bottom in October 2008 and March 2009.
Among the MSCI sectoral indices, financials gained the most by rising 89 per cent from its March 9 low, indicating that the worst for the banking sector was over. The industrials and materials index gained over 46 per cent, suggesting that stimulus packages announced by governments are likely to spur recovery in the core sector.
The rise of 35 per cent in the information and technology index rose 35 per cent indicates revival in the services sector. The consumer durables, automobiles, telecom and healthcare index have not moved with the markets, rising in the range of 14-19 per cent.
This indicates concern over growth prospects as economic revival is still in the slow lane.
