Markets in 2000: China tops

Reshma Krishnan

IT was a roller-coaster ride for the markets in 2000 ending the year on a sour note. It was a year of volatility, with Nasdaq crashing to all-time lows and investors wondering which market would crash next. This came amid many new and fantastic rallies during the course of the year.

Surprisingly, the best performer was the Chinese market as both its key indices showed stunning returns. The winner was Shenzen B index -- the one available to international investors, registering a return of 67.57 per cent, closing the year at 546.85 from the 1999 December close of 3,898.37. Its sister index -- the Shenzen A -- for the domestic investors, followed with a return of 40.23 per cent closing 2000 at 938.36, from the previous year's close of 559.95.

The Italian Mibtel is runner-up for 2000 registering a return of 4.6 per cent. It closed at 30,323 for the year ending 2000 from the previous year's 28,976 December close. Among those that posted a positive return were the Toronto Stock Exchange Index and the Australian All Ordinares.

While some indices bucked the trend, most performed miserably. Among the worst-performing indices of 2000 is the most talked about leader of the New Economy, the tech-laden Nasdaq composite. It closed at 2470.52, posting a negative return of 38.8 from the 1999 year-end close of 4,037.

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It had a good run up to March when the frenzy surrounding the potential profits of the information sector was at its peak. This frenzy reached a peak when the Nasdaq touched its all time high of 5048.62 in March. This promising rally crashed and affected many other markets. Investors the world over are still trying to decide if the fall was a crash or a correction.

Therefore, a culmination of rising oil prices, lawsuits, profit warnings and election mishaps erased all the gains made during the year. The Nasdaq ripple was felt all over the world markets, affecting especially the Japanese Market. In fact the Nasdaq crash was the last thing they needed amid their own problems. But the Nikkei mimicked the Nasdaq and saw negative return of 27.2 per cent to close the year at 13,785.69. It too hit a record high hitting 20,706.65 -- a level not seen since December 1996. The outlook had been positive, as investors were confident of a recovery in the Japanese economy. But failing confidence in the Japanese financial structure led to a downward spiral.

The CAC-40 (France) was, in fact, a surprise as it saw a relentless rally this year and touched an all-time high in May at 6557.39. It still showed negative returns of 0.5 per cent closing at 5926.42 from 1999 close of 5,958. Another index that went against the general market trend was the Hang Seng.

However, it too came under the Nasdaq effect and experienced a fall in September, which led to a close lower than last year's. It is an interestingly weighted index as its fortunes heavily depend on the performances of three companies -- China Mobile Telecommunications, Hutchison Whampoa and HSBC Holdings. These companies account for around 60 per cent of the index.

The index closed the year at 15095.03, posting a negative return of 11 per cent. The worst performer of the year was the Korean Kospi index. Its value little more than halved during 2000 and closed at 63.35, a steep fall of 51.3 per cent from the 1999 close of 130.