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K. S. Badri Narayanan

The three-month period ending September 2003 was the best third quarter since 1991 as investors' enthusiasm for shares has been rekindled on the back of an expected upturn in the global economy.

SEPTEMBER clearly belonged the emerging markets such as Indonesia, the Philippines, Thailand, Brazil and India, where the benchmark indices scored handsome gains ranging from 4.5 per cent to as high as 12.8 per cent.

But Korea's Kospi fell over eight per cent, while German's Dax, France's CAC-40 and Holland's AEX also witnessed a sharp fall.

Collapse of the world trade talks in Cancun and the decision by OPEC to cut output rattled equity markets, particularly the US and the Europe.

US markets: The US markets were quiet during September. The mood was mixed on the opening day following the release of uninspired manufacturing data for August.

However, the tech-focussed Nasdaq breached the 18-month peak and the Dow Jones Industrial Average its 14-month high during the first week of September on hopes that economic recovery at the US markets would increase spending in the IT sector.

The US Federal Reserve also painted a rosy picture reporting that the US economy continued to show improvement in July and August. However, Nokia, the world largest mobile phone maker, spoiled the mood for tech counters by announcing worse-than-expected earnings forecast.

Europe: Led by insurance stocks, equities across Europe opened on strong note following solid manufacturing data, which raised hopes of rising corporate earnings.

However, the weakness on Wall Street, a dollar under pressure against the euro, profit bookings and the absence of reassurance from economic data dragged most equity markets across Europe.

Asia: The Tokyo blue chips began the month on a firm note and breached the psychological 11,000-mark (15-month high) on the back of growing confidence in the US economy recovery.

However, the markets turned into negative zone following the weak performance of tech counters at the US bourses and the strong yen against the greenback.

In Bangkok, stocks surged breaching the September 1997 peak level, after the Government said it expected the economy to grow 6.1 per cent this year as against last year's 5.1 per cent. SARS outbreak in Singapore weakened the sentiment in the country as in Hong Kong as well.

However, as the new SARS outbreak turned out to be an isolated incident, investors returned to the market, albeit on low key affair.

On a nine-month scale, once again the emerging markets such as Thailand, Brazil, Indonesia and India outperformed, returning solid gains to the investors as compared to with developed nations.

The three-month period ending September 2003 was the best third quarter since 1991 for the world equity markets as investors' enthusiasm for shares has been rekindled on the back of an expected upturn in the global economy.

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