India and China may be the flavour of the world markets, but when it comes to performance of their stock exchange indices in 2008, they are doing the worst in Asia. While the Bombay Stock Exchange’s National Index (popularly known as BSE 100 Index) dipped by 16.08% during the first two months of 2008, the Shanghai Stock Exchange’s Shanghai A Index slipped as much as 17.36% during the same period.
A comparison of major market indices in Asia by Thomson Financial reveals that none of the indices posted positive returns during the said period. The best performing index during the period was Jakarta Se Composite, which declined by less than 4% during the said period. Click on chart to enlarge.
According to analysts, the bad performance of these indices is largely due to the late correction in India and China. “Even though global markets witnessed a slowdown in December, emerging markets like India and China carried on till January. In case of India, the correction happened only after the first fortnight of January,” explains Dipen Shah, head — research of Kotak Securities.
According to Mr Shah, the correction may continue for the next two-three months, and a lot would depend upon the next quarterly results of India Inc. “There has been a definite indirect impact of the sub-prime lending crisis on the markets. With FIIs losing money due to the US recession, it has hit the liquidity in India and China.
Thanks Kalpesh, the market sure is cyclical and many analysts expect the market to fall further. However its like an ODI match too, very unpredictable.