Despite the sharp recovery of 7.24% at US$ 39.72 a bbl in the calendar year in the crude oil prices, global stock markets are yet to take positive cues. The steep surge of nearly 17% in gold, considered a safe heaven for investors, has attracted global fund managers in a big way. Rallying gold had decelerated the recovery in stock markets, experts believeIn the wake of the failed efforts by Central Banks of major economies, both developed and developing, to engineer a sustainable recovery, stock indices of leading countries have more or less disappointed the investors in the current calendar year. Of 20 leading global stock indices, only nine have offered positive returns as on April 8 2016. Prime among these are Brazil, Russia, Indonesia and Thailand. Two of the US stock indices are slightly up with meagre gains.
Despite the sharp recovery of 7.24% at US$ 39.72 a bbl in the calendar year in the crude oil prices, global stock markets are yet to take positive cues. The steep surge of nearly 17% in gold, considered a safe heaven for investors, has attracted global fund managers in a big way. Rallying gold had decelerated the recovery in stock markets, experts believe.
The world stock markets kicked-off 2016 on a worst possible note in several years and market pundits are of the view that Central Banks of leading economies should come up with efficient measures. However, measures like pushing benchmark interests to negative zone and expectations of further rate cut have not borne the expected fruits. A rate cut of 25 bps in the benchmark interest rates by the Reserve Bank of India (RBI) last week, turned futile for the Indian stock markets.
Stocks in emerging economies leave investors jittery
Of 11 global stock indices offering negative returns in CY16, seven indices belong to emerging economies. The constant weakness in Chinese economy, heavy offloading by global fund managers, strengthening US dollar and failure of Central Banks’ monetary policies are seen as factors influencing the fall in stock indices of emerging economies like China, Japan, Hong Kong, India and Singapore. Despite Bank of Japan (BoJ) having pushed the benchmark interest rates into negative territory, the Nikkei 225 index of Tokyo has tumbled 17.25%, the most significant fall among leading stock indices. However, surge in the commodity price including gold, crude oil, base metals and certain agri-commodities like coffee and wheat, have helped commodity stocks in some of the emerging markets like Brazil and Russia.
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