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Worst Week For Global Stocks In Years Apparently Shrugged As Week Sees Strong Start

Worst Week For Global Stocks In Years Apparently Shrugged As Week Sees Strong Start
The worst week in year for the global stock markets was shrugged off by them following a late rally on Friday which was also followed up on Monday.  
There were gains made in the Asian markets on Monday in addition to a higher trading of 0.7 per cent at the S&P 500 futures
However, two broad questions still remain for investors. The first is whether the fall in the market the end of a bearish trend and if so, whether how sharp would the rebound be.
MKM Partners’ chief market technician, Jonathan Krinsky said that a V-shaped recovery may not be in the cards. Krinsky finds 2010 flash crash in the U.S. and last week’s market trading to have similar characteristics.
Krinsky said that while there was a fall for two months for the S&P 500 in the market drop in 2010, it was just days that the market had recovered from the drop then.
On Monday, gain in Asian markets was led by Shenzhen which has a large number of smaller-cap stocks in China. While both the startup-heavy ChiNext Price Index and the Shenzhen Composite fell by at least 6 per cent in the last two weeks, the former noted a rise of 2.6 per cent while the later rose by 3.5 per cent. In 2017, both the indexes had been underperforming compared to peers.
Ivan Ip, a stocks strategist at UOB Kay Hian said that during the weekend, there were reports in the Chinese state-run media that there could been an end to the volatility in the Chinese stock market. “That was taken as a cue to invest by local traders,” he added.
A 2.3 per cent increase in shares of Samsung drew the Kospi of South Korea to gain 0/9 per cent. This rise followed the successful star of the Winter Olympics and an invitation to the South Korean leader for a summit in Pyongyang by North Korean leader Kim Jong Un.
The move may “help alleviate Korean geopolitical tensions in the near term,” said OCBC Bank.
“Investors are still trying to catch their breath after the roller-coaster ride” across asset classes last week, the Singaporean bank said.
There was about 0.5 per cent increase in stick markets in Hong Kong and other parts of Southeast Asia.
However, there was a fall of 0.3 per cent in Australia’s S&P/ASX 200 due to losses in oil and banking shares and a 0.4 per cent fall in New Zealand’s benchmark, both against the trend.
The impending Lunar New Year holiday would potentially result in lower trading volumes this week in many Asian stock markets. Beginning on Tuesdya, the first market to go on a holiday will be the Taiwan market. Its index Taiex gained about 0.5 per cent following its worst loss in a week in six and half years.
Tokyo market were closed on Monday due to a holiday. There were reports during the weekend about the reappointment of Bank of Japan Gov. Haruhiko Kuroda resulting in very little change in the yen.
Gains of 0.6 per cent was made by Singapore’s stock benchmark after it traded softly in the beginning. Following the decision by India’s three main stock exchanges to ban licensing market data for offshore derivatives products that are linked to Indian stock indexes, there was a fall of 6.3 per cent in the shares at the Singapore Exchange which was a one year low for the exchange.

Christopher J. Mitchell

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