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Asian Stock Markets Lose Allure

By Dan Weil   |   Friday, 10 Jul 2009 03:03 PM

Asian stock markets are on a tear this year, but the party may end soon as the fragile economies in Asia and the outside world weigh on stocks.

Money going into Asian stock funds outside Japan already started to wane last month, The Wall Street Journal reported.

Asian markets have performed well in recent months, amid optimism that their economies will fare better than those of the west.

The Shanghai Composite Index has soared about 70 percent so this year, while Hong Kong's Hang Seng Index is up 24 percent and the Bombay Sensitive Index jumped 47 percent.

But global economic weakness will limit further gains, experts say. Specifically, the beleaguered U.S. consumer sector greatly crimps Asia’s export machine.

"Yes, Asia wasn't going to be as bad as some people feared, but at end of the day, most Asian economies except for China, Indonesia and India will have negative growth for this year," Jan de Bruijn, a money manager for Threadneedle of the U.K., told The Journal.

Most experts expect little movement in prices for the remainder of the year.

"If you're not sure whether or not you're in a bull market, that's an indication that you're in a bear-market rally," Mark Konyn, chief investment officer of RCM Asset Management, told The Journal.

Others agreed. “The market is finally returning its focus to the present, rather than looking for an eventual recovery,” Masaru Hamasaki, a strategist at Toyota Asset Management, told Bloomberg.

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Asian stock markets are on a tear this year, but the party may end soon as the fragile economies in Asia and the outside world weigh on stocks.Money going into Asian stock funds outside Japan already started to wane last month, The Wall Street Journal reported. Asian...
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