Global stock markets performed strongly in the beginning of the year. Not only the US stocks have repeatedly set new highs. The Wall Street Journal (WSJ) reported that some Asian markets may have risen too rapidly. The naming of Taiwan, South Korea, and India stocks is worrying. Investors should pay attention to whether there is fundamental support. .
So far in 2020, the Taiwan and South Korean stock markets have outperformed the US stocks. The Taiwan Weighted Index (Taiex) has risen by 36%, South Korea’s Kospi Index has risen 45%, and the S&P 500 Index has risen only 18% over the same period.
India’s Mumbai Sensex index is the most puzzling, the indexUSDThe price increase is comparable to that of the S&P 500, but Indian stocks do not have the huge monetary or fiscal stimulus as the United States. In the next 12 months, the estimated price-to-earnings ratio of Indian stocks has even surpassed that of US stocks since March lows.
The reasons for the rise of the stock markets in the three places are different. Taiwan has almost kept the virus out of the door with solid epidemic prevention. South Korea has kept the number of confirmed cases low as a model for other countries, and India will lead the developing countries in vaccinating.
Although Taiwan stocks, South Korea and India’s stock markets have different causes, they have in common that the epidemic will end one day. Unless these topics can be transformed into structural bullishness, it cannot explain why the stock markets of these countries suddenly outperform U.S. stocks. .The report pointed out that although US stocks have gained considerable momentum, at least investors’ expectations for the outlook are still supportive.
There are already some worrying signs in Asian stock markets.South Korean retail investors burst into buying stocks, and retail investors have maintained stable daily trading volume at over 30 billion in the past weekUSD, But never exceeded 10 billion a day in 2019USD。
The prosperity of the Indian stock market lies in the hands of foreign investors, who will buy 3 billion overprinted shares in 2020USD, Is the only country in the main Asian stock market that has been overbuyed by foreign capital.
WSJ pointed out that it is not wise to play against the market, especially when retail buying is insane, let alone head-on, but investors must pay attention to rising trends that are not supported by fundamentals. In case the market narrative changes, some Asian stock markets may suffer. Maximum impact.
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