The current economic turbulence is taking a toll on the markets. Just like the US markets, the Asian markets are also being driven mostly by news flows. Positive news inflows boost the investor sentiments and push the markets up and on any negative news inflow, the indices simply tank.
In the last one year, South Korea抯 benchmark index, Kospi, has lost more than 40 per cent (as on November 27, 2009). From 1834 levels, the index has dropped down to 1063 levels. In major market news, the equities markets in Hong Kong also plunged to significantly lower levels as compared to a year ago. The Hang Seng has lost more than 50 per cent from 27,371 levels, a year ago to 13,552 levels.
Same goes for other markets apart from Indian share market. In the Japanese markets, Nikkei index has slumped 44.7 per cent in one year. From 15,153, the index has fallen to 8,373 levels. Other market news: The world抯 second largest economy after the US, Japan, was official declared to be in recession, a couple of weeks back. Yen抯 rapid appreciation against the dollar was one of the factors that hampered the growth of the country. Also a continuous decline in the country抯 exports due to lack of demand in the American and European markets contributed to a contraction in growth.
China抯 Shanghai Composite also plummeted more than 60 per cent in the last 52 weeks. From 4803, the index has dropped to 1917 levels (as on November 27, 2009). Another stock indicator, Shanghai 300, fell from 4648 to 1870 levels during the same period. It shed nearly 60 per cent during the time period. As for the Indian share market, the choppiness continues. Still below the 10,000 mark, the Sensex continues to reel under selling pressure. Analysts point out, that the markets will continue to witness selling coming in at higher levels. Volumes will stay thin and there will be a lack of participation in the markets.
And of course, FIIs would pull out funds on every rally. Bailouts and rescue packages notwithstanding, the fundamentals of the broader economy continues to remain shaky. Lack of liquidity is still a key problem faced by banks as well as corporates across the problem. Almost all major economies of the world are in recession. Corporate earnings are expected to contract in the next two quarters as a result of demand destruction.
Situations are such that most countries are announcing bailout packages, one after another. This probably hints to the fact that the crisis could be deeper than anticipated. It may also get more prolonged. Investor sentiments got a boost when USA announced another bailout plan of $800 billion to increase consumer loans by banking and mortgage institutions. The markets got another reason to cheer when the China抯 cut its key rates on Wednesday. The Asian markets rallied after the cut in the rates. The Indian markets, also surged on expectations of similar rate cuts by the RBI.
So, when it comes to the markets news in Asia, much depends on the global cues and moves made by governments and financial bodies across the world.
In the last one year, South Korea抯 benchmark index, Kospi, has lost more than 40 per cent (as on November 27, 2009). From 1834 levels, the index has dropped down to 1063 levels. In major market news, the equities markets in Hong Kong also plunged to significantly lower levels as compared to a year ago. The Hang Seng has lost more than 50 per cent from 27,371 levels, a year ago to 13,552 levels.
Same goes for other markets apart from Indian share market. In the Japanese markets, Nikkei index has slumped 44.7 per cent in one year. From 15,153, the index has fallen to 8,373 levels. Other market news: The world抯 second largest economy after the US, Japan, was official declared to be in recession, a couple of weeks back. Yen抯 rapid appreciation against the dollar was one of the factors that hampered the growth of the country. Also a continuous decline in the country抯 exports due to lack of demand in the American and European markets contributed to a contraction in growth.
China抯 Shanghai Composite also plummeted more than 60 per cent in the last 52 weeks. From 4803, the index has dropped to 1917 levels (as on November 27, 2009). Another stock indicator, Shanghai 300, fell from 4648 to 1870 levels during the same period. It shed nearly 60 per cent during the time period. As for the Indian share market, the choppiness continues. Still below the 10,000 mark, the Sensex continues to reel under selling pressure. Analysts point out, that the markets will continue to witness selling coming in at higher levels. Volumes will stay thin and there will be a lack of participation in the markets.
And of course, FIIs would pull out funds on every rally. Bailouts and rescue packages notwithstanding, the fundamentals of the broader economy continues to remain shaky. Lack of liquidity is still a key problem faced by banks as well as corporates across the problem. Almost all major economies of the world are in recession. Corporate earnings are expected to contract in the next two quarters as a result of demand destruction.
Situations are such that most countries are announcing bailout packages, one after another. This probably hints to the fact that the crisis could be deeper than anticipated. It may also get more prolonged. Investor sentiments got a boost when USA announced another bailout plan of $800 billion to increase consumer loans by banking and mortgage institutions. The markets got another reason to cheer when the China抯 cut its key rates on Wednesday. The Asian markets rallied after the cut in the rates. The Indian markets, also surged on expectations of similar rate cuts by the RBI.
So, when it comes to the markets news in Asia, much depends on the global cues and moves made by governments and financial bodies across the world.
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