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January 2, 2013updated 04 Apr 2017 3:30pm

Global markets remain remarkably resilient: S&P

Global market performances bucked the pessimistic sentiments in 2012 with 43 out of 46 global markets posting gains resulting in a 2.39% increase over the 12 months to 31 December.

By Elsa Buchanan

Global market performances bucked the pessimistic sentiments in 2012 with 43 out of 46 global markets posting gains resulting in a 2.39% increase over the 12 months to 31 December.

The gains could have topped 3.49% S&P Global BMI Broad Market Index (BMI) if the US’ sub-par 1.05% was excluded, according to senior index analyst at S&P Dow Jones Indices, Howard Silverblatt.

With a year marked by central bank’s attempt to stimulate economies and defer worries about possible inflation by persistently lowering interest rates, global developed markets’ gains were the highest.

According to S&P Dow Jones Indices World-By-Numbers: December 2012 report, developed markets accounted for 25 of the 43 gains (Israel was off 4.65% in the same period) and emerging markets showed 18 gainers and 2 decliners (Hungary declined 2.46% and Morocco fell 3.55%).

However, the global BMI (excluding the US) was down 4.93% over the two-year period ending December 2012.

 

Portugal: a surprising 10.55% gain

In the developed markets – especially in recovering European markets – unexpected gains came from Portugal (which was up 10.55% in the last month of 2012 and posted a positive return of 3.03% over a three-month period ending December 2012). Greece finished 2012 with "an impressive 24.66%" year-on-year basis according to Silverblatt.

The Hellenic Republic was up 9.12% in December, but was still off 48.07% for the two-year period.

Overall, developed markets added 2.07% for the last month of 2012, which could be regarded as a 3.14% increase if the US’s gain was left out.

For the year, developed markets gained 13.91% (13.73% excluding the US), with their two-year return now positive at 4.58% (but still off 3.20% ex-US).

 

Fiscal cliff not hurting yet

According to Silverblatt, "in the post-U.S. election period, the fiscal cliff was the key issue impacting global markets, with the U.S. debt issue returning in the last few days of [2012]."

He said that the markets, while affected, appear to have gained some footing with, for example, an impressive 14.03% gain by the US over the year 2012, and another 13.09% over the two-year period.

"The test, of course, will come as austerity plans go into place," says the senior analyst, as signs of a downward slope are showing.

 

Mixed results from emerging markets

Emerging markets’ results showed 4.85% gains for December 2012, ending the year up 15.27%.

They outperformed developed markets, said Silverblatt, but their two-year return remained firmly in the red (-11.5%) with 2011’s loss still showing its impact.

Impressive end of year positive returns came from Turkey (60.69%), the Philippines (44.69%), Egypt (41.18%) and Thailand (39.61%), while countries such as Morocco, the Czech Republic and Brazil showed signs of difficulty with losses accounting for 14.7%, 3.23% and 0.27% respectively over 2012.

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