We asked our readers last week about the outlook for Asian economies for the rest of the year. Optimism was in short supply, with half the voters predicting either no improvement or deterioration. But the single biggest voting bloc reckoned on slow improvement.
Markets have not been so generous. Stocks in Hong Kong took a beating last week as the index closed at 16,250 points on Tuesday, its lowest close for more than two years. Prices recovered later in the week but suffered another fall yesterday as global investors once again sold emerging-market assets to repay liabilities at home in developed markets.
Such behaviour suggests that the sell-off in emerging markets is not based on fundamentals, implying that the selling is overdone, but such forced selling hardly bodes well for developed markets. And, in turn, that hardly bodes well for any market.
These confusing signals might help to explain the mixed response to our poll last week — and possibly suggest that now could be a good time to get back into oversold Asian markets. Or not. Who knows?