London (CNN) – Despite the bad prognosis and worrying doomsayers of grim tidings, the new year has got off to a rousing start with London up 2.29%, Frankfurt up 1.5% and even the Parisian market, which has the most to worry about, gaining just under 1%.
There are those who will use this to support the belief that if the first trading day is up, then that bodes well for the year overall. They would be wrong.
Just take last year – on the first trading day of 2011 the FTSE, DAX and Dow all rose. By the end of the year, the FTSE was nursing a loss of 5.5%, the DAX was down a whopping 15%, and only the Dow managed a gain of around 6%.
Going further back won’t help much either. As Mark Hulbert points out, by and large the first market day of the year tells us nothing about how the year will play.
(CNN) – India announced plans to allow foreigners to invest directly in domestic companies listed in one of the world’s fastest growing economies.
The government “decided to allow qualified foreign investors to directly invest in Indian equity market in order to widen the class of investors, attract more foreign funds, and reduce market volatility and to deepen the Indian capital market,” according to a New Year’s Day statement from India’s Finance Ministry.
Before only institutional investors and Indians living abroad were allowed to invest directly in local companies. The move will allow individuals to buy as much as 5% of a company’s shares. Total shares owned by foreigners, however, will not be able to exceed 10% of a company’s capital, the ministry said. The new rules are expected to take effect January 15.
While among the world’s fastest growing economies, India’s breakneck growth slowed in 2010, slipping to 6.9% in the quarter ending in September – it’s lowest growth rate in more than two years.
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