A Round-Up of Global Stock Market Performance

by: Prieur du Plessis

What you see may not be what you get, especially when analyzing historical stock market performance. One would be excused for thinking that global stock markets were on an uninterrupted upward path when considering their good gains in U.S. dollar for the three months that ended on July 31, 2007. But that is only part of the markets’ story.

It would be misleading not to also consider shorter-term figures in the light of the recent topsy-turvy financial markets. Concerns about the possible negative impact of U.S. sub-prime mortgages and some other headwinds led to a sharp decline of 312 points on the Dow Jones Industrial Index on July 26 (click here for article), followed by another 208 point decline the next day (click here for sequel article). This created a ripple effect, with most stock markets closing down sharply for the latter period of July.

The chart of the Dow Jones World Index clearly illustrates the rough patch hit by stock prices word-wide during the second half of July.

DJIA Chart
Source: StockCharts.com

Although 24 of the 52 indices in the accompanying table still managed to end in positive territory for the one month ended July 31, only a few of the major indices (such as the Shanghai Composite Index with +3.2%, the FTSE 100 Index with +0.5% and the Helsinki Index with +0.2%) registered gains during July’s traumatic last week.

The best three-month performance came from the Venezuela Index with a rise of 34.5%, followed by the Thailand Set Index with 33.6% and the Peru Composite Index (our previous leader) with 28.8%.

SETI chart
Source: StockCharts.com

China and Brazil are still the best three-month performers of the BRIC countries. India, with a gain of 13.5%, slipped somewhat from 6th position back to 11th place, but Russia (+3.2%) made strong headway from the 3rd-worst position to 26th. The chart of the Russian Trading System Index, however, shows a particularly bumpy ride.

Source: StockCharts.com

Pan-European stock markets (German DAX Index with +2.3%, FTSE 100 Index with -0.5% and the Paris CAC Index with -3.3%) as well as the US stock markets in (Nasdaq 100 Index with +3.6%, Dow Jones Industrial Index with +1.1% and the S&P 500 Index with -1.8%) showed a mixed bag of performances. The major Asian indices, however, were even more inconsistent, ranging from the Hang Seng Index’s strong gain of 14.0% to the Nikkei 225 Index’s level-peg (0%) performance.

Bright diamonds: The following stock market rankings have improved considerably compared to the six-month rankings:

Source: Plexus Asset Management (based on data from I-Net Bridge)

Although Taiwan experienced a huge rally for most of the three-month period, the sell-off during the second half of July was quite severe.

TW 100
Source: StockCharts.com

Sick dogs: The stock markets that have slid down most on the ranking table were represented by the following combination of mature and emerging indices:

Source: Plexus Asset Management (based on data from I-Net Bridge)

TA Chart
Source: StockCharts.com

The next round-up could be of particular interest depending on whether last week’s stock market action represented a mere bull market pull-back or perhaps the start of something more painful. Although the current bounce may have more legs, I am not convinced that we are out of the woods yet. The next round-up’s figures will tell the story.

Click the following link for the detailed performance figures:

Global stock market price movements (pdf)