"Asian markets start 2004 on high" reports the BBC. How are stock markets related to 'the underlying real economy'? Are they a good measure of economic performance? For example do they have a direct relationship to industrial output and sales (such as the motor industry) as this report suggests?
The gains come after what was a bumper year in major stock markets in 2003, with the Tokyo Nikkei registering its first annual gain in four years.Markets were closed in Japan, the Philippines, Thailand and New Zealand for the continuing New Year public holiday.
One factor in the bullish mood was the lack of big attacks in Western countries, following warnings from security services that the end-of-year holidays might have been targeted.
But local factors play a part too, with predictions that Asian carmakers, for instance, are in for a bumper year in export terms.
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