Friday, 5 February 2016

Stocks rise in US but recovery in Japan may take time

Markets were relatively calm on Thursday.

The S&P 500 rose 0.2 percent even though US crude fell 1.7 percent.

However, the STOXX Europe 600 fell 0.2 percent and the Nikkei 225 fell 0.9 percent.

The latter faces yet more declines, if history is anything to go by.

From Bloomberg:

Since the Nikkei 225 Stock Average tumbled more than 20 percent from a peak last month, Japanese equities have made several attempts at rallies, only to falter...

History supports the view that the recovery will take time. Wiping out a bear market takes seven and a half months on average, according to an analysis of the index’s 14 occurrences since 1989. Worse, shares tend to fall further after the initial 20 percent drop -- the Nikkei has slid an additional 18 percent on average, according to the data that include steep selloffs in the early 1990s, the Asian financial crisis, the dot-com bubble and the global financial crisis.

No comments:

Post a Comment