Asian bourses had another grim year, heading south with other stock markets around the world, but the region is expected to shine next year despite some uncertainty.
Analysts were hoping for an upturn in Asian share prices this time last year after the US-led global slowdown last year followed by the shockwaves of the Sept. 11 terrorist attacks on New York and Washington.
But the recovery failed to materialize because of the weak US economic upturn as well as concerns about a possible double-dip recession for the world's biggest economy.
That was exacerbated by US corporate scandals and oil prices shooting up ahead of an expected US-led invasion of Iraq.
Stock markets tumbled as Asia's crucial export sector struggled amid sluggish consumer spending in the US, its biggest export destination.
The region's biggest market, Tokyo, hit a series of 19-year lows and other major bourses in Hong Kong, Singapore and Taipei shed 17 percent. However, some of the smaller Southeast Asian markets surprisingly flourished amid the gloom.
With the US economy expected to pick up next year, exporters stand to gain from stronger orders. The US economy is projected to grow 2.6 percent next year from 2.4 percent this year.
The mix of a US turnaround and a fast growing China are seen as the right ingredients to bolster regional economies, although Japan shows little sign of emerging from its decade-long slumber.
"The year to 2002 proved to be another annus horribilis for equity markets and a tough 12 months lie ahead, yet as a region Asia is set to outperform and come end of 2003, Asia should trade higher on the back of a clearer global picture," said Markus Rosgen, ING Financial Markets' chief strategist for the region.
Japanese share prices hit a series of 19-year lows in the second half of the year because of major problems with the country's economy, as well as the global stock market downturn.
The Japanese economy continues to be crippled by deflation, along with the large number of bad loans at banks whose plunging share prices pulled down the rest of the market.
The key Nikkei-225 index lost about 20 percent after shedding almost 24 percent last year. On November 14 it ended at 8,303.39 -- its lowest close since March 25, 1983.
Hong Kong stocks were also hit by economic weakness and deflation. The Hang Seng index fell about 16 percent after dropping more than 24 percent this year.
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