World stock markets were mixed Monday as investors started the first full trading week of the New Year, relieved that 2008 is behind them but fully aware that the economic picture around the world is grim and will likely remain so for quite some time.
The FTSE 100 index of leading British shares closed up 17.85 points, or 0.4 percent, at 4,579.64, while Germany's DAX rose 10.92 points, or 0.2 percent, to 4,983.99. France's CAC-40 was up 10.23 points, or 0.3 percent, at 3,359.92.
On Wall Street, the Dow Jones industrial average dropped 69.53 points, or 0.8 percent, to 8,965.16, while the broader Standard & Poor's 500 index fell 4.39 points, or 0.5 percent, at 927.41. The losses in the U.S. were hardly a surprise following strong gains last week. The Dow in fact closed at a two-month high on Friday after a 3 percent gain.
"It's been a pretty hesitant start to the week for equity markets in Europe and the U.S.," said Neil Mackinnon, chief economist at ECU Group.
The relatively muted performance in Europe and the U.S. stood in marked contrast to the gains witnessed in Asia earlier, where investors appeared encouraged by mounting expectations of a massive $755 billion fiscal stimulus from the incoming Obama administration in the U.S. Most Asian markets were closed last Friday so much of Monday's gains in Asia were a case of catching up.
In a shortened half-day session, Tokyo's Nikkei 225 stock average gained 183.56 points, or 2.1 percent, to 9,043.12, its first finish above the 9,000-point line since Nov. 10.
Hong Kong's Hang Seng climbed 3.5 percent to 15,563.31 and Shanghai's key index gained 3.3 percent to 1,880.72. Singapore's benchmark jumped 4.5 percent, with stock measures in Taiwan, India, South Korea, Malaysia and Thailand higher as well.
Stock markets around the world enjoyed a strong rally over the last month or so, in particular since Christmas Eve, though the moves have been largely sentiment-driven as opposed to being based on any fundamental change in the economic or financial outlook.
Investors know they face a difficult first half of the year at least, as company earnings and the economic data flow remain downbeat.
Some analysts reckon that the recent resilience in the markets could be a sign that many investors have already started positioning for a possible turnaround later in the year.
"Big crises invariably lead to big buying opportunities, but not yet," Morgan Stanley equity analysts told clients Monday.
Though some investors may be tempted to be bullish, the investment bank's analysts think fundamentals are not close to bottoming out and valuations are not outright cheap yet.
"In bear markets, patience is the golden virtue, capital preservation rules. Stay patient until the next bull market starts, maybe later in 2009," they said.
Markets will certainly face tough hurdles later in the week when a raft of economic news, particularly Friday's U.S. non-farm payrolls data for December, is released.
"There are no green shoots of recovery and I think they are a long time coming," said ECU Group's Mackinnon.
One bright spot in the gloom of late 2008 in the markets was the sharp fall in the price of oil, which should act as a spur to economic growth around the world.
However, oil prices have started the New Year ticking up again amid the spiraling violence in Gaza and tentative evidence that the recent OPEC production cuts are taking hold.
Light, sweet crude for February delivery was up $0.36 at $46.70, having fallen to around $40 a barrel towards the end of 2008.
Meanwhile, the euro sank against the dollar as year-end currency movements _ which helped it rally strongly _ have come to an end. The euro was down 2 percent at $1.3637.
The dollar was up 1.2 percent at 93.09 yen.
___
AP Business Writer Jeremiah Marquez in Hong Kong contributed to this report.
No comments:
Post a Comment