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Chart of the day: Pessimism persists for global equities oversold on sentiment

PUBLISHED : Monday, 31 August, 2015, 11:17pm
UPDATED : Tuesday, 01 September, 2015, 11:43am

While a number of Asian indices last month were beginning to see contrarian support emerge, fundamentals suggested the risk was that the revival in markets would be short lived. And so it proved, with Chinese devaluation being quickly followed by a US capitulation that rapidly morphed into a global equity rout. This left the MSCI World Index Sentiment Barometer Indicator at levels consistent with a degree of pessimism last seen in 2011. Global equities have become oversold on sentiment and well placed for a near-term contrarian bounce, albeit markets will likely remain volatile as indices form a base after such a sharp reversal.