Monday, December 27, 2010

Behavior of World Indices in 2010

The year 2008 saw a big correction in stock markets world over and it was followed by a rally from 2008. Many Indices rallied and gave one of the biggest appreciation in 2009. The year 2010 can be considered as not bad.


The European Indices rallied in 2010 but the magnitude is less when compared to the Asian Markets. Many Indices in Asia moved past their 2008 highs. Srilankan Stock indices moved passed their 2008 high. Indian Market came very closer to their high, but so far it has not crossed that levels.


But the notable performance is from China’s SSEC. When compared to their other Asian counterparts, the chinese index has so far under performed. If the stock market continues to under perform in coming months, I doubt whether they could maintain their present growth rate.


Since Stock Market prices reflect the future perception of the Market, continuous underperformance foretell a big correction in China’s Stock Markets. If the fastest growing economy in the world, china, doesn’t see their indices move up, it cannot sustain its growth.


In US, the markets rallied, but is has not rallied as much the Asian markets moved.