Stock Indices before Global Financial Crisis and Now

Dow Jones Industrial Average Index (Dow) crossed the 14,000 points level for the first time on Friday. When compared with 2 July 2007 before the Global Financial Crisis (GFC) hit, Dow surpassed the index of 13,535 then. This was an increase of 3.5%.

What about other key indices comparing 1 Feb 2013 against 2 July 2007? See table below.

2 Jul 2007 1 Feb 2013 Change (%)
Dow Jones Ind Avg 13,535 14,009 + 3.5
Hang Seng Index 22,151 23,721 + 7.1
Sensex – Mumbai 14,664 19,781 + 34.9
London FTSE 6,590 6,347 – 3.6
STI 3,550 3,291 – 7.3
Aust All Ord 6,298 4,941 – 21.5
Shanghai Composite 3,836 2,419 – 36.9
Nikkei Index 18,146 11,191 – 38.3

Hang Seng Index went up 7.1%. Sensex went up 34.9%

Shanghai Composite Index and Nikkei Index have still a long way to catch up. Both indices were still way below 2 July 2007 level by 36.9% and 38.3% respectively.

Australia All Ordinary index was still below 21.5%. London FTSE was 3.6% below.

The Straits Times Index (STI) is now 7.3% below 2 July 2007 level.

In the case of US stock market, Hong Kong market and India market, is exuberance misplaced? Has the world economy returned to pre-GFC level that equities are justified at these levels?

At the other extreme, China market, Japan market and Australia market are still laggards. Are there opportunities for more upside?

London FTSE and STI have some more room for catching up. Or will they?

Copyright © 2013, limkimtong for Living Investment

The material presented is intended to be general and written in layman’s language as much as it is possible. The author shall not be liable for any direct or consequential loss arising from any use of material written. Please seek professional advice from your financial advisor or financial institutions on material written covering financial matters.

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