Those Rebounds Are Good, But Asia Stocks Still Have Long Way to Go

(Bloomberg) -- The best two-day advance for Asian stocks since 2008 may bring some cheer to investors eyeing their battered portfolios, but there’s a long way to go before any semblance of stability is restored.

The MSCI Asia Pacific Index has rallied 9.7% since the start of Tuesday, narrowing its loss from a January high to 24%. The gauge is still 29% below its record hit in 2018. And volatility is still surging: price swings over the past two weeks are at levels not seen in more than 11 years.

Recent history doesn’t offer much hope. The last three surges of more than 5% in the S&P 500 Index were immediately followed by losses of similar magnitude. But news that the U.S. has reached a deal on stimulus measures may provide more momentum for gains, and some optimism that the worst for markets may have passed.

Taking a look at the major markets in the region, there is still plenty of work to be done.

In Japan, the Topix index is still 23% away from its mid-January high:

Meanwhile, South Korea’s Kospi index has an even tougher road, needing to jump at least 35% to get back to its own January high:

China’s Shanghai Composite Index, among the first markets to take a hit from Covid-19, is a relatively modest 12% away from its Jan. 13 high. The Hang Seng Index, however, is still some 25% away from its high this year:

And here’s how far away other key markets are from their pre-crisis highs:

• India’s S&P BSE Sensex Index would need to rally 57% to regain its record level of 41,952.63 from Jan. 14.
• Australia’s S&P/ASX 200 Index, at a peak of 7,162.49 on Feb. 20, would require a 43% rebound.
• Singapore’s Straits Times Index would have to climb 35% to hit its 2020 high of 3,281.03.
• For Southeast Asia more broadly, the MSCI Asean Index would need to jump 56%.

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