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K.S. Badri Narayanan

THE global markets saw both a peak and a bottom during the 1999 - 2003 period, with sentiment swinging wildly on both sides.

After reaching record low levels in the previous three years, equity markets broadly across the globe, were able to arrest the downslide in 2003 with investors once again fancying their chances in global equities on hopes of revival in economy and good show from corporate majors, particularly in the US.

Expectations that all the worst news that plagued the markets were over and that no more negative news would emanate from any corner also seemed to have convinced the investors to take part in the market.

The scene during the period was well captured by the tech-laded Nasdaq: on March 10, 2000, the Nasdaq hit its all-time high of 5,132.52 — an 88 per cent increase from October 1, 1999.

And in about two-and-half years' time, a wave of negative news such as the bursting of the Internet bubble, asbestos litigation, the WorldCom bankruptcy, a strong Euro and a weak dollar, troubles at the banking sector in Japan, weak financial performances from global corporate majors, and to cap it all, the September 11 attack on World Trade Center in the US, shattered market confidence and emptied investors' purse, as the Nasdaq touched its six-year low (in September 2002).

Other markets too felt these tremors, albeit to varying magnitudes.

The other major events that shook the markets were the overstating of financials by corporate majors, conflict of interest between audit firms (that also had consulting arms) and corporates, and the outbreak of the killer disease - severe acute respiratory syndrome or SARS in select Asian countries.

For the already beleaguered market, the US-led war on Iraq came as bolt from the blue.

However, with the smooth end to the war, markets traced back their revival path.

Amidst all these, the dragon stocks flew sharply as the Chinese economy remained unaffected and was strong. The China's Shenzhen-B indices skyrocketed by whopping 177 per cent since 1999. The worst performer was, of course, the Nasdaq that plunged by about 59 per cent.

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