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| India misses relief-triggered global rally |
| BS Research / Mumbai Nov 30, 2008, 00:26 IST |
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The latest US bailout package sees S&P 500 post biggest weekly rise since 1974.
Stock markets across the world, barring India, China and Malaysia, gained by over 10 per cent each last week on speculation that the US government’s bailout package is expected to shore up the economy. The Standard & Poor’s 500 Index gained 12.03 per cent, recording the biggest weekly advance in 34 years.
The S&P 500 has rebounded by 19 per cent from an 11-year low, though it is still down by 43 per cent from its October 2007 peak. Benchmark indices of France, Germany and the United Kingdom surged by over 13 per cent each, while the Nasdaq Composite was up by 10.92 per cent, even as the Dow Jones Industrial Average rose by 9.73 per cent.
Among the Asian markets, the Hang Seng registered a gain of 9.71 per cent, followed by the Jakarta Composite (+8.31 per cent), Nikkei-225 (+7.60 per cent) and Seoul Composite (+7.21 per cent), which moved up in tandem with the global indices. However, the Shanghai Composite of China declined by 4.99 per cent, while the KLSE Composite of Malaysia was down -0.09 per cent.
The BSE Sensex of India and the Straits Times of Singapore rose by 1.99 per cent and 4.24 per cent respectively, but underperformed the major world markets.
The MSCI Asia Pacific Index rose by 6.8 per cent to 82.67, the second-best gain this year, which was surpassed by a 6.9 per cent rally at the end of October, when central banks from Japan to Taiwan lowered borrowing costs. Commodity producers had their biggest gains among the ten industry groups.
BOOSTER DOSE
Weekly performance of global and Asian indices |
| Indices |
Nov 21, 2008 |
Nov 28, 2008 |
% change |
| FTSE 100 |
3781 |
4288 |
13.41 |
| CAC 40 |
2881.26 |
3262.68 |
13.24 |
| DAX |
4127.41 |
4669.44 |
13.13 |
| S&P 500 |
800.03 |
896.24 |
12.03 |
| Nasdaq Composite |
1384.35 |
1535.57 |
10.92 |
| Dow Jones |
8046.42 |
8829.04 |
9.73 |
| Hang Seng |
12659.20 |
13888.24 |
9.71 |
| Jakarta Composite |
1146.28 |
1241.54 |
8.31 |
| Nikkei 225 |
7910.79 |
8512.27 |
7.60 |
| Seoul Composite |
1003.73 |
1076.07 |
7.21 |
| Straits Times |
1662.10 |
1732.57 |
4.24 |
| BSE 30 |
8915.21 |
9092.72 |
1.99 |
| KLSE Composite |
866.88 |
866.14 |
-0.09 |
| Shanghai Composite |
1969.39 |
1871.16 |
-4.99 |
The surge in world indices is attributed to the Federal Reserve as it committed as much as $800 billion to help resuscitate the credit markets. Global investors also speculated that President-elect Barack Obama’s economic team will bolster growth in the US.
Citigroup rallied 18 per cent as its troubled assets received a $306-billion guarantee from the US government. General Motors climbed 8.9 per cent and Ford Motor surged 25 per cent as auto makers considered cutting debt and labour costs to win the government aid.
Asian stocks had their second-best week this year after China slashed interest rates, spurring speculation that the government measures will pull the global economy out of recession and boost demand. China cut its key lending rate by the most in 11 years to revive the economy.
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