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K.S. Badri Narayanan

LED by the US market, major bourses across the globe continued their bull run in November. A slew of positive news that included increased durable goods orders and declines in jobless claims in the US seemed to have given confidence to investors.

In fact, the US markets never looked back since October 9, when they reached their lowest levels in five years, to record their biggest two-month gain since 1987. The Standard & Poor's 500 Index increased 15 per cent in the past two months, after declining 29 per cent from January to September.

Microsoft provided the early momentum for the markets after a US Federal Court judge endorsed the company's anti-trust settlement with the US Government.

Then came the big booster from the Federal Reserve, which surprised the investing community by reducing the short-term interest rate by half a percentage point, and thus bolstering investor expectations of a faster economic recovery. The global markets, which were waiting for the Fed's decision, shot up immediately. Further, the Vice-Chairman, Mr Roger Ferguson's description of comment that the US economy "as fundamentally sound" ensured the upward momentum for the markets.

Iraq's unconditional acceptance to allow UN-led inspectors to check whether the country has any weapons of mass destruction relieved the global investors. The UN team is now inspecting in Iraq.

Meanwhile, the markets even discounted some negative news. In his testimony, the Chairman, Mr Alan Greenspan, outlined the continued weakness in economic activity. "While the economy is softening or stagnant there is no evidence that it is accelerating on the downside," Mr Greenspan said.

Cisco Systems also came out with a rider by declaring that its current quarter sales are likely to fall. Ironically, Cisco was the among the major gainers list.

The US Government report that consumer purchases, which account for almost two-thirds of the economy, climbed 3.7 per cent in the 12 months ended in September also confirmed investors' optimisms in the US market.

Hewlett-Packard ensured tech stocks continues to rally by announcing an impressive performance. This has fuelled rally in other tech counters such as Intel Corp, Texas Instruments and Xilinx Inc, which gained more than 20 per cent, during the month.

These positive triggers on the US markets also spilled over to the other markets in Europe and Asia.Weaker yen and bank stocks helped the Japanese markets rebound. Besides, news that Japan's custom-cleared trade surplus rose 96 per cent in October also bolstered the sentiment for the Asian major. For the month, the Nikkei rose 6.7 per cent, while the Topix advanced 3.5 per cent, the first winning months since May.

The star performers were Luxembourg's LuXX Index, Sweden's OMX Stockholm Index, Nasdaq, Indian bourses (the BSE Sensex and NSE's S&P, CNX, Nifty) and Korea's Kospi.

However, Singapore's Straits Times, Kuala Lumpur's Composite and China's Shenzhen-B appeared in the negative list.

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