Investors have watched Asian markets this week as they continued to tumble.
An article yesterday from Forbes.com entitled: ”Asia
Stocks To Twist With U.S. Earnings” describes the 3 day selling spree in
emerging markets: “Nikkei 225 average
dropped 8% to 8,693.82, at one point nearing a five-year low touched the week
before. Hong Kong’s
Hang Seng fell 10.8% to 14,554.21, while China’s Shanghai Composite Index
slumped 7% to 1,930.65.”
This was all on fears of weak
3rd quarter reports, continued US troubles, and general fears of
slowing worldwide growth. However, stocks rallied sharply yesterday
- almost across the whole of Asia. The Emerginvest Heat map shows it quite well
graphically:
Hong Kong was up 5.28%, Japan up 3.70%, India 2.5%, South
Korea 3.0%, and Thailand 1.2%. an article published on Marketwatch called: “Mumbai,
Hong Kong set for rebound; Tokyo Jumps,” describes how the dual forces of
bargain hunters who are snatching up companies which are exceedingly
undervalued, in combination with Korea announcing on Sunday that they will “back
as much as $100 billion of banks’ foreign-currency debt” sparked the jump in
Asian markets today.
It marks an important point, both psychologically and
economically as the week-long slide seems to have stopped. The article from
Marketwatch cites Markus Rosgen from Citigroup as saying: “’Given current
valuations and sentiment, we shall increasingly be looking for opportunities to
invest. Until now, by contrast, we had been looking for opportunities to sell,’
they added.”
As massive losses continue to accrue, it seems like bargain
hunters are becoming more and more willing to admit they might see a bottom in
the moderate future. Looking at stocks like ICICI Bank (IBN) and China Mobile
(CHL) which are down well over 50% for the year, helps to underscore the buying
opportunities which are becoming increasingly attractive. I still think there
are going to be additional downturns, especially if exports have a sharper drop
than expected, but I will be keeping a close eye on the markets in the near
future for good growth buys.
