Global markets: Will the rally continue? - Views on News from Equitymaster

Helping You Build Wealth With Honest Research
Since 1996. Try Now

  • MyStocks


Login Failure
(Please do not use this option on a public machine)
  Sign Up | Forgot Password?  

Global markets: Will the rally continue?

Jun 7, 2003

Globally, the markets were in positive territory during the week. In US, indices reached their highest levels for the year. Both the Dow and the NASDAQ gained about 2% in the entire week. This was on account of rising investor optimism regarding recovery in the US economy during the second half of the current fiscal. The week started on a positive note from the economic standpoint. Manufacturing reports, which were better than expected fueled optimism early on. Also, success of several cancer drugs raised the stocks in the drugs sector. The next two days saw the US indices surging further. This was on account of positive reports from the services sector (the service index improved to 54 from its April figures of 50). This led to gains in technology stocks. However investigations against IBM from Securities Exchange Commission pared the gains. Dow touched its 9,000 levels during this session.

On Thursday and Friday, US markets remained mixed, however the underlying sentiment was bullish. Despite poor unemployment numbers for the last week of May, market sentiments were not hampered and the indices continued to move higher. This apart, better than expected job reports for the month of May raised further optimism. However some profit booking was seen towards the end of closing this week. Despite this, the Indices managed to close higher for the week. Next week will see further economic reports and this will further drive investor sentiments.

Dax 2,983 3,127 4.9%
Nikkei 8,425 8,786 4.3%
BSE 3,178 3,304 4.0%
FTSE 4,048 4,150 2.5%
Dow 8,850 9,063 2.4%
Hang Seng 9,487 9,695 2.2%
NASDAQ 1,596 1,627 2.0%

Globally indices continued to trade strong for the second consecutive week. This week the top gainers were Dax (5%), Nikkei (4%) and BSE (4%). Overall investor optimism seems to be positive. With the expectation that US economic recovery may happen in the second half of the current fiscal, exports in both Asia and Europe, which are dependent on US markets, may receive a boost and this is leading to optimism in other markets worldwide. This apart, the effect of SARS is also fading away.

(Price in US $)31-May-037-Jun-03Change
Dr. Reddy's19.321.29.6%
HDFC Bank17.018.48.0%
ICICI Bank6.77.14.7%
Satyam Infoway5.55.51.1%

Indian ADRs remained strong for the week barring some weakness in Rediff (9%). Silverline Technologies was the top gainer and it was up 65%. Technology ADRs were among the major gainers during the week. However one needs to be cautious on this front considering the declining margins and weak global IT spending. Dr. Reddy's Laboratories was one of the major gainers for the week. The company had announced its FY03 results last week and it expects the growth in its US business to be at higher levels going forward. The stock is trading near its 52-week highs.

Last two weeks has seen the global indices moving up and there has been an increase in investor optimism world over. This is seen from the fact that the NASDAQ has gained about 24% in this year. From here on it would be interesting to see if the rally is likely to be sustained since there are no clear long term signs of recovery in the US economy. Hence one must exercise caution instead of going overboard.

Equitymaster requests your view! Post a comment on "Global markets: Will the rally continue?". Click here!


More Views on News

What Do the Charts Say About Buying Smallcaps Now? (Fast Profits Daily)

Sep 18, 2020

Everyone seems to be excited about buying smallcaps now...but is it the right thing to do? What do the charts tell us? Find out in this video...

Sundaram Bluechip Fund: Will Hold the Stable Horses (Outside View)

Sep 18, 2020

PersonalFn briefly outlines the newly launched NFO note HSBC Corporate Bond Fund.

Wait! Don't Chase Smallcaps Now (Profit Hunter)

Sep 18, 2020

Let the markets take a breather before you jump in.

How Much Money Do You Need to Be a Professional Trader? (Fast Profits Daily)

Sep 17, 2020

In this video I'll answer a question I get asked often: How much capital do I really need to trade the markets for a living? Let's find out...

A Contrarian View on Whether You Should Load Up on Small Caps podcast (Views On News)

Sep 17, 2020

Rahul Shah discusses whether the SEBI circular is the perfect time to start investing in good quality small caps

More Views on News

Most Popular

How the 8-Year Cycle Can Help Identify Multibaggers (Fast Profits Daily)

Sep 11, 2020

This is how you can apply the greed and fear cycle in the market to pick stocks.

I Recommended this Stock over Page Industries because it's Relevant to Doubling Your Income (Profit Hunter)

Sep 7, 2020

Things are not often what they seem in the market and how you can take advantage of this.

The NASDAQ Whale Could Harm Your Portfolio (Fast Profits Daily)

Sep 7, 2020

The discovery of Softbank pushing up prices on the NASDAQ will cause volatility in the market. Stay alert!

This Could Be the Best September for Auto Stocks (Profit Hunter)

Sep 11, 2020

Here's why I think this month could be a great for auto stocks.


Covid-19 Proof
Multibagger Stocks

Covid19 Proof Multibaggers
Get this special report, authored by Equitymaster's top analysts now!
We will never sell or rent your email id.
Please read our Terms


Sep 18, 2020 03:37 PM