If investors in New York and London are seeing the first delicate signs of a recovery, their counterparts in developing countries say they are witnessing a full-on spring.
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After a crushing fall in the last year and a half, stock markets in developing countries are riding a wave of optimism that the recovery of the global economy is at hand and being led by the developing world, especially China. Though emerging markets remain far below the lofty highs they attained more than a year ago, investors are again viewing their chances of growth as better than those of the United States or Europe.
As a result, the Indian Nifty stock index has jumped by 64 percent in the last three months. China’s CSI 300 index of shares in Shanghai and Shenzhen has risen 37 percent and Brazil’s Bovespa increased 41 percent over the same period. By comparison, the Standard & Poor’s 500’s gain of 28 percent looks modest.
Let's take a look at some charts. Click on all charts for a larger image
Brazil: from October to the end of March prices formed a nice horizontal bottom. Now prices are in a strong uptrend. Note the price/SMA relationship is incredibly bullish -- prices are above the SMAs, all the SMAs are moving higher and the shorter SMAs are above the longer SMAs
Russia: prices consolidated in a triangle pattern at the beginning of this year. Then prices broke higher and have continued. Notice how volume increased as prices moved higher. Note the price/SMA relationship is incredibly bullish -- prices are above the SMAs, all the SMAs are moving higher and the shorter SMAs are above the longer SMAs
India: prices bottomed at the beginning of March and have been moving higher since. Note the price/SMA relationship is incredibly bullish -- prices are above the SMAs, all the SMAs are moving higher and the shorter SMAs are above the longer SMAs
China: prices bottomed at the beginning of this year in a downward sloping triangle pattern. Since then prices have been moving higher. Note the price/SMA relationship is incredibly bullish -- prices are above the SMAs, all the SMAs are moving higher and the shorter SMAs are above the longer SMAs
