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.

 

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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.