Markets have bottomed out but spectacular gains unlikely: Analysts
By Yang Huiwen
WHAT a difference a few weeks make.
Earlier this month, as bourses almost everywhere continued to spiral downwards, it seemed almost unthinkable that a major rally was just around the corner.
Some markets including Singapore took a breather yesterday, but nevertheless the recent run-ups are striking.
The most closely watched barometer of all, the Dow Jones Industrial Average in New York, has gained 17 per cent since its March 9 closing low.
Asian markets are also up 15 to 20 per cent from their early March lows. The Straits Times Index (STI), for instance, is up 16.1 per cent since March 9.
All this stock market cheer is prompting a nervous thought: Is the worst for stock markets really over?
Crystal ball-gazing is a business fraught with uncertainty but some analysts are willing to cautiously suggest the answer might be yes.
They say optimism started pouring into markets after the US government's long-awaited plan to purge banks' toxic assets, as well as Treasury Secretary Timothy Geithner's programme to unfreeze credit markets, began to take shape.
US President Barack Obama said on March 3 that buying US shares 'is a potentially good deal' for long-term investors, and since then, the index has added about 14 per cent.
The enthusiasm has since faded slightly with the Dow Jones' 1.5 per cent fall overnight and some key Asian markets, including Hong Kong, Tokyo and Singapore, ending in the red on Wednesday.