• Investment World
• eWorld
• Catalyst
• Mentor
• Life
• Canvas
• Praxis
• Urban Pulse
• Brand Quest

K. S. Badri Narayanan

LED by Japan, August clearly belonged to the Asian markets as they posted smart gains even as majority of benchmarks across the globe finished the month in the positive territory.

US: The US markets began the month on a cautious note, despite better-than-expected factory orders and strong growth in the services sector. Sentiment weakened further after Cisco Sytems announced disappointing earnings.

However, encouraging reports from retail majors — Wal-Mart and Best Buy — and upbeat US job market data enthused the market.

Amidst this, on August 14, a massive power blackout hit North-Eastern US and South-Eastern Canada. However, the markets survived the blackout, as the power outage did not cause much damage and disruption.

Even the disappointing earning news from Hewlett-Packard — the computer and printer maker — did not deter the rally as the Nasdaq climbed to its 16-month high. However, the broader benchmarks — Dow Jones Industrial and the S&P 500 — succumbed to profit-booking.

Brazil's move to reform the pension system seemed to have lifted the sentiment for the equity market.

The decision of Brazilian central bank to cut its prime-lending rate by 250 basis points to 22 per cent, the largest cut in four years, was also well received as the country's Bovespa index leapt 11.8 per cent.

Europe: European markets began the month on firm note, betting on the US recovery. In fact, equity markets touched their highest levels for the year in London, Frankfurt, Paris and Amsterdam.

The FTSE 100 surged above the crucial 4200 mark, after engineering and automotive parts producer GKN and the Barclays, the UK's third largest bank, turned in good numbers. The big five European carmakers — Volkswagen, Peugeot, Renault, DaimlerChrysler and BMW — drove the market further following positive broker comments and the weakening of Euro against the US dollar.

Asia: Nikkei also began the month on a weak note, but the announcement of strong GDP data for April-June quarter boosted sentiment at the Tokyo bourses; the GDP expanded by 0.6 per cent, better than analysts forecast.

Expectation of higher export growth following data showing rising machinery orders pushed up the Nikkei 225 average above the psychological 10,000 mark. The market got a further fillip after several investment banks upgraded their forecasts for fiscal 2004 GDP.

Led by banking major HSBC, the Hong Kong's Hang Seng surged to its best level for nearly a year amid mounting optimism about the prospects for the domestic and international economies.

Led by Samsung Electronics and stocks connected to the Hyundai conglomerate, the South Korean market also witnessed a strong rally.

Article E-Mail :: Comment :: Syndication

Stories in this Section
A guide to fixed income investing

Copyright © 2003, The Hindu Business Line. Republication or redissemination of the contents of this screen are expressly prohibited without the written consent of The Hindu Business Line