Asian stock markets gave investors a white-knuckle ride this year, but most are up sharply and analysts predict turbulent gains next year despite a severe US financial crisis.
"I think Asian markets will be up over the whole of 2008 -- but they are set to fall substantially over the next few months first," said Shanghai-based expert Andy Xie (
Chinese and Indian shares led the pack this year, fizzing up about 85 percent and 40 percent respectively and defying fears that they had already risen too far.
China held a series of sometimes huge stock flotations that raised billions of dollars, while foreign investors continued to pour money into Indian stocks.
But the key Japanese bourse had a year to forget as the Nikkei-225 index slumped about 12 percent amid a global credit crunch rooted in the ailing US economy.
"The overall Japanese market has come down quite sharply in the last few weeks," said Tokyo-based fund manager Hideo Shiozumi, the chief executive of Shiozumi Asset Management.
Asian markets have struggled since last month, mainly because of fears about the impact of an expected US economic slowdown after a mortgage default crisis there, analysts say.
China's attempt to curb economic and stock market growth, for instance by hiking borrowing costs repeatedly, has also affected sentiment, they say.
Xie warned the Hang Seng index in Hong Kong could fall 20 percent to 22,000 points over the next few weeks. But he predicted a recovery in Asia from March onwards.
Among other major Asian bourses, Taiwan is little changed. South Korea is up about 28 percent since the start of this year, Singapore roughly 11 percent and Australia some 10 percent.
"I suspect that Asian shares will continue to do well over the next 12 months," said Matt Robinson, an analyst at Moody's Economy.com in Sydney.
He said this year had been characterized by persistent stock market growth in Asia interrupted by sharp sell-offs.
The latter included a slide in February, when Chinese shares tumbled nearly 9 percent in a single day, he said.
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