World equity markets rebound in February
14 Mar 2008
The United States was the Strong Exception for the Month, Declining -2.87 per cent
Standard & Poor's Index Services today said that the world's developed and emerging equity markets bounced back from January's devastating declines. According to Standard & Poor's Index
Services' global stock market review, The World By Numbers, equity markets in developed economies posted a slight decline in February of -0.12 per cent compared to January's return of -7.83 per cent.
In contrast, emerging equity markets returned to positive territory with a gain of 7.65 per cent, a huge comeback from their loss of 12.44 per cent in January.
"Although, most of the world's markets rebounded last month, the United States, which represents approximately 40 per cent of the global equity market, was the main exception," says Howard Silverblatt, senior index analyst at Standard & Poor's. "We believe its 2.87 per cent decline for the month is mostly due to the decline of the dollar, fears over a perceived US recession and a general belief that US growth will be substantially lower than most emerging countries."
In contrast from January, where all 26 developed markets were negative, 19 of the 26 markets returned to positive territory with an average gain of 2.43 per cent in February.
Double-digit gains were posted by Luxembourg (+14.16 per cent) and Norway (+12.46 per cent); Iceland posted the sole double-digit loss of -11.43 per cent. While the gains helped reduce the January losses, only Luxembourg (+2.42 per cent) and Canada (+1.65 per cent) posted three-month gains. Twelve-month returns were mixed with 17 developed markets in positive territory and nine in the red.
The rebound for the emerging equity markets was stronger than that of the developed markets, with 21 of the 26 markets gaining an average of 7.74 per cent. China reversed January's decline of 21.41 per cent, posting a gain of 9.39 per cent. Other notable gains were from Taiwan (+16.07 per cent) and Brazil (+12.41 per cent).
The three-month period continues to remain mixed with 13 markets increasing and 13 remaining in negative territory. Due to strong 2007 gains, however, all 26 markets remain positive, posting an average gain of 36.75 per cent.
Four of the ten GICS sectors posted gains in February. Looking at the sectors excluding the US, eight of the 10 posted gains, demonstrating the depth and impact of the US declines.
Energy was the best performer with a 7.95 per cent (ex / US +8.50 per cent) monthly gain. Financials trailed with a 4.66 per cent loss (ex / US -1.40 per cent). On the sub-industry level, there was significant negative news in the Financials sector.
Thrifts & Mortgage Finance posted a 14.64 per cent decline, followed by Diversified Consumer Services with an 11.41 per cent decline and Consumer Financing with a 10.56 per cent decline.
