i Develop Stocks Advisory

Monthly Global Market Update The underlying determinant for markets across the globe was the escalation in crude oil prices which breached the USD 135 per barrel mark and then retreated from this level. Global inflation was hence on everyone’s mind. Apart from this news flow from the developed economies was mixed. The US had its share of good and bad news on the economic front, and hence there was no clear consensus on the direction of the economy in the near term. Upbeat quarterly results from a handful of retailers and an improvement in sales of new homes in April for first time in six months were some of the positives for the US economy. However, during the month an upward pressure on inflation also led to speculation that the US Federal Reserve may in fact resort to a hike in key lending rates. Faltering news in the financial sector continued to dampen any positive sentiment. As a result of this uncertain environment the Dow Jones turned negative while the NASDAQ posted a much better performance. The Nikkei has now posted impressive returns for two straight months. The trigger was that the Japanese economy grew for the third straight quarter in the January to March period on the back of robust exports and a pickup in private residential investment, beating expectations. The GDP rose 0.8 per cent on quarter, after growing by a revised 0.6 per cent in the October-December period. After out performing global Indices in April, the Indian market clearly underperformed the large global indices. Escalating domestic Inflation was the prime cause for this, at a time when domestic fuel prices have been kept artificially low. In light of this we might see a continuation in such under performance over the following month. The outlook for markets across the globe is far from robust. On an optimistic front, for more than two months there have been no victims reported in the sub-prime mess. However, global fuel prices threaten a speedy recovery for economies across the world. Country Index Name 30-Apr-08 30-May-08 1 month Returns (%) China Shanghai Composite 3693.11 3433.354 -7.03 India BSE Sensex 17287.31 16415.57 -5.04 Hong Kong HangSeng 25755.35 24533.12 -4.75 Taiwan Taiwan Weighted 8919.92 8619.08 -3.37 USA Dow Jones 12820.13 12638.32 -1.42 UK FTSE 6087.3 6053.5 -0.56 Malaysia KLSE 1279.86 1276.1 -0.29 Switzerland SMI 7529 7511.29 -0.24 France CAC 4996.54 5014.28 0.36 Singapore Strait Times 3147.79 3192.62 1.42 South Korea KOSPI 1825.47 1852.02 1.45 Australia All Ordinaires 5657 5773.9 2.07 Germany DAX 6948.82 7096.79 2.13 Japan Nikkei 13849.99 14338.54 3.53 USA Nasdaq 2412.8 2522.66 4.55 Argentina Merval 2095.53 2205.72 5.26 Indonesia Jakarta Composite 2304.52 2444.3491 6.07 Brazil BOVESPA 67868 72592.5 6.96 Russia RTSI 2122.5 2459.88 15.90 MSCI World Index 1508.99 1525.72 1.11 MSCI Emerging Markets Index 48893.53 49651.13 1.55