Post Olympics what to expect from Brazil!

Olympic Games Rio 2016 comes to an end with US, UK, China at the top rank of the table and India managing to get 2 medals – definitely a proud moment for the country.

It is said and believed that Olympics results into lot of economic activity around the country and helps in stimulating country’s economic growth led by tourism and other technological development to manage the entire event.

Let us try to look at Brazilian equity market and see if the event indeed resulted into a stand apart movement on stock market or the overall movement has continued as per the ongoing trend for many years.

Below chart of Bovespa (Brazil) was published in our monthly research report on 6^th August 2016. This clearly represents that irrespective of the event the stock market has continued to move within the blue channel and prices reversed on upside in early 2016 which coincided with lows formed in a few of the Emerging equity markets like India.

So was it really Olympics that helped Brazilian stock market in 2016? It seems more like a coincidence to me!

Figure 5: Bovespa (Brazil) weekly chart

Below is part of the research from “The Financial Waves Monthly update”

Brazil stock market index - BOVESPA  shows that after forming a top in early 2008 this index has still failed to cross above that highs and has corrected substantially. Later after topping out in late 2010, this index has continued to move in downward sloping blue channel and has now arrived near the resistance. It will be crucial to see if the same can be broken this time or prices again reverse back on downside. Brazil had not been preferred destination and the correction that started in 2008 is still ongoing.

Out of the BRIC nations it seems only Indian markets have lived upto the expectations to some extent post 2008 and rest other nations have failed miserably. This is another reason why we think the ………..

Olympic Games Rio 2016 now comes to an end. Let us see if the blue channel that has worked so well for Bovespa continues to act as resistance irrespective of the event!

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BRIC nations at a glance! Showing gloomy picture though..

The current issue of “The Financial Waves Monthly update” is now published. 

This long term report is showing 12 different charts with Elliott wave counts and important analysis on Sensex, Nifty, Gold, Nifty / IT ratio, stock of the month and indepth analysis on BRICnations – Brazil, Russia, China in addition to Hong Kong. Each of these markets have been drifting lower while the Indian markets are busy making new highs. The story looks similar to 2008. See it yourself where the other emerging markets are headed.

BRIC and Hang Seng Market outlook

Figure 7: Brazil daily chart

 Figure 8: Russia daily chart

Figure 9: Shanghai Composite 

Figure 10: Hang Seng

Elliott wave counts are removed from the above charts purposely but shown in our actual reports.

Following is the brief excerpt from the same:

Analyzing Brazil, Russia, China and Hong Kong equity markets:

It is widely believed that world is out of the woods and the Equity markets of developing economies have stabilized. However, looking at the above major 4 markets from developing countries it is not showing good picture. Except India none of the BRIC markets have given any positive returns. Also the biggest consumer of resources – Chinese stock market index – Shanghai Composite is still struggling near the lows. Developed economies have performed much better compared to emerging economies and food for thought is the crisis of 2008 actually originated in US and Europe that are trading at life time highs!

This time we have covered Equity Market performance of Brazil, Russia, Hong Kong and China in addition to Indian markets shown earlier. This is because India has witnessed major rise inSensex or Nifty from last year and trading near life time highs which is not the case with equity markets of these countries. So, we should be aware what is happening with our neighbors to get clearer picture of our future because in the end all the countries are directly or indirectly related.

Brazil: world’s seventh wealthiest economy but GDP has fell drastically from the high of 7.5% to 0.9% in 2012 and 1.90% last year. Moreover, ….

Russia: GDP fell from 3.4% in 2012 to 1.3% in 2013. Medium trend is …..

China: world’s second largest economy has recently signaled further easy of monetary policy. Its economy grew 7.7% in 2013 same as 2012 and 7.4 in the first quarter of this year. Once with average growth of more than 10% ….

Hong Kong: has a free market economy with GDP Annual growth rate in last quarter is 2.5% and previous last 5 quarter has been 2.9%. Over medium term, the trend has been absolutely sideways for Hang Seng index ……….

So what is in it for Indian economy and stock market? To get detailed analysis and medium to long term forecasts on Gold, Sensex, Nifty, BRIC Nations subscribe NOW “The Financial Waves Monthly forecast”. Visit http://www.wavesstrategy.com/index.php/store.html for subscription options.