Market Outlook: 06-16-09

Robert Hsu, June 16, 2009

After being one of the strongest regions in the world this year, it's not surprising that Asia caught most investors' attention when Asian stocks fell this week. The decline resulted in a sharp drop for both the MSCI Asia Pacific Index and the MSCI World Index.

The drop marks the largest for Asian markets this month, with Japan's Nikkei index falling nearly 3% and Hong Kong's Hang Seng index dropping nearly 2% in trading today.

Falling commodities and lagging investor confidence caused the sudden slump. Asian stocks have suffered already this month as prices for copper and other commodities fluctuate.

I don't think we should start worrying, though. Most Asian stock markets are still up much more than other regions around the globe year to date. For example:

Russia' RTSE index is up 70%
India's Sensex index is up 54%
Mainland Chinese shares in Shanghai are up 53%
Taiwan's Taiex index is up 36%
Japan's Nikkei is up 13%

When you compare that to a nearly a negative 2% loss on the Dow or the 2.4% loss on Europe's FTSE index or the measly 2% gain on the S&P 500 year to date, you can see that the real opportunities still lie in Asia.

So, we must remember that this is only a couple days in trading, and when you look out to the bigger picture, Asia is still a viable investment opportunity. That's because this region is home to one of the few countries still posting robust economic growth this year.

China continues on its path to economic recovery, and is on track for a full recovery in the second half of the year. And its economic strength will likely spill over to its neighbors – something we've already seen occur with Taiwan.

That's why I've been recommending that my Asia Edge subscribers pick up strategic short-term trades to take advantage of the strength of Asian companies, particularly those benefiting from China's economic strength and stability.

Just take a look at how three of my top Asia Edge recommendations have performed recently:

A leading online game developer in China, up 41% in 9 weeks
A leader in China's e-learning business, up 40% in 7 weeks
A leading manufacturer of copper, up 26% in 11 weeks

Want to know more about what to expect for Asia's markets, how they'll fare this year and what you should be investing in now? Join Asia Edge today!

Sponsored Links

What's happening in the world's major foreign markets right now? Will current events affect the stocks in your portfolio? Read InvestorPlace Asia's Top Stories to find out everything you need to know in order to stay on top of global economic news.

more...

Every country has its own special customs and traditions. Being familiar with a country's culture can often make a difference in whether you gain or lose from investing in its stock market. Check out our culture section to learn more about the societies of the world's fastest-growing emerging economies.

more...

There's a lot happening around the world today, and it's important to know how it's affecting your investments. Watch the latest videos covering important Asia topics!

more...