UPDATED ON:
Monday, January 05, 2009
14:38 Mecca time, 11:38 GMT
 
Business 2009
Global markets buoyed by optimism

Global markets open strong
despite negative economic forecasts [EPA]

World stock markets have risen as a Wall Street rally and government stimulus plans buoyed investor confidence across Asia and Europe.

Despite dismal economic news regarding the deteriorating manufacturing industries in the US, Europe and China, the global markets on Monday reflected investor optimism for the new year.

A push by Barack Obama, US president-elect, and Wen Jiabao, Chinese premier, for massive stimulus packages, fueled the rise of Japan's Nikkei, which during its opening session of 2009 climbed above 9,000 points for the first time in two months. Stock measures in India, Malaysia and China also rose, with Europe showing smaller gains.

Though early signs have been good, investors are still bracing for a difficult six months, when company earnings and economic data could prove especially bleak.

In its report on global economic prospects for 2009, the UN is expected to discuss a "synchronised global downturn".

Trading on sentiment

Still, the market's recent resilience could be a sign that many have already started positioning for a possible turnaround in the world economy and equities prices later in the year.

"We are still trading more on sentiment than fundamentals, and the sentiment is that fiscal stimulus will allow the economy to recover," said Dariusz Kowalczyk, chief investment strategist for CFC Seymour in Hong Kong.

"The market is relatively cheap, and with investors hoping for a recovery in the global economy in the second half, it makes sense to buy now before that happens."

 Source: Al Jazeera and agencies
 
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