Tuesday marks the one-year anniversary of the S&P 500's
<.SPX> 13-year closing low.
Bank of America-Merrill Lynch, noting that the index has
rallied almost 70 percent since those lows, argued that history
shows stock prices continue to climb in the second year after a
bear market.
"Only once was 'year two' a year of negative return," it
said, referring to the early 1930s bear market. It said the
average gain in the first year of recovery is 46 percent,
followed by 9 percent in the second year.
The MSCI index of Asian shares outside Japan
<.MIAPJ0000PUS> was little changed, after having hit its
highest level in over six weeks on Monday, lifted by
encouraging U.S. economic data last week.
In Tokyo, the Nikkei stock average <.N225> ended down 0.2
percent, having also hit six-week highs the previous day.
Commodity markets were also subdued. Oil prices <CLc1> fell
0.6 percent, off Monday's eight-week highs, as investors
awaited industry data expected to show another rise in U.S.
crude inventories. [EIA/S]
To be sure, price performances this year show less risky
trades as clear winners, even as a global recovery appears to
slowly gather steam.
The yen <JPY=> and gold <XAU=>, traditional safe-haven
plays, are up 3.1 percent, and 2.5 percent respectively.
Corporate and government bonds, especially those in
emerging markets, have chalked up decent returns too. The
benchmark JP Morgan Emerging Markets Bond Index Plus
<.JPMEMBIPLUS> has gained nearly 3 percent so far this year,
while the HSBC Asia dollar bond index <ADBI=HSBC> is up more
than 2 percent.
In contrast, the MSCI index of Asian shares outside Japan
is down 0.7 percent since January. Likewise, the Australian
dollar <AUD=>, an investor favourite among riskier,
higher-yielding currencies is up just 1.3 percent.
The pull-back on Tuesday benefitted the U.S. dollar and
yen, which are favoured as "safer" investments in the currency
market.
The U.S. dollar index <.DXY> edged up to 80.538, with
resistance lurking around its February high of 81.34. The yen
was firm against the U.S. dollar at 89.94.
The euro <EUR=>, still plagued by concerns about Greece's
fiscal crisis, drifted lower to $1.3606.
Greek Prime Minister George Papandreou tried again on
Monday to contain the crisis and shore up support for Greece.
He urged the Group of 20 nations to go after market
speculators, who he blamed for raising Greece's borrowing costs
by betting the country may default on its debts.
[ID:nN08177822]
Sterling <GBP=> also faltered on weak economic data and
after Moody's said Britain faces a dilemma over its support for
the banking sector.
(Editing by Kim Coghill)