Equity markets may rebound by early '09: PM council

China and India have suffered the biggest fall in the global equity market slump over the past six months but a possible recovery may ensue by early 2009, the prime minister's economic advisory council said on Wednesday.

"Both emerging and development markets are down with China and India having dropped the most, developed countries by relatively less and commodity exporting countries like South Africa, Brazil, Russia and Soudi Arabia the least," the EAC said in its latest economic outlook for the current fiscal.

The Shanghai Stock Exchange has registered maximum fall (56 per cent) from its peak, while the benchmark index of the Bombay Stock Exchange dipped by as much as 40 per cent and the Manila Stock Exchange dropped by 39 per cent, registering the third largest

fall.

The report added that 'having lost one fifth to one third of their value, equity assets would appear to have greater upside rather than down side prospects. If there are no major further shocks, a slow albeit hesitant recovery may be
envisaged.'

"Besides, the fact that world economies can offset the disturbance in the financial sector of the developed country, can contribute to an improvement in the behaviour of equity markets in early 2009," the report said.

• India likely to grow at a lower 7.7% in 2008-09
• Agri growth may decline to 2%: PM council