| By Andrew Farmer and Simon Senior
andrew.e.farmer@jpmorgan.com and simon.senior@jpmorgan.com
AS OF MARCH 2012
European Indices
All quotes in Euros
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Commentary
European markets continue to be dominated by concerns on the continuing Sovereign Debt Crisis. The EMU has been the worst performing global region on a year-to-date basis. Spain came under significant stress again with the IBEX down 14% in EUR terms for the first quarter of 2012. It was the worst performing market in Europe and the gap with core European Markets (the Dax in particular) has widened further.
Asian Indices
All quotes in Euros
Commentary
- The ASX200 index had a strong start to 2012 at AUD +6.9% (EUR +5.12%), its best first quarter since 2006 and strongest quarter since the third quarter of 2009; but even the currency gain in AUD to USD at +1.3% did not keep it up with the strong performing world equity markets. The ASX was driven by the strong underlying Industrial and IT sectors.
- Chinese markets experienced high volatility during the first quarter of 2012. While the government has been acting to promote growth (monetary policy shifting from containing inflation to promoting economic growth), the markets have reacted negatively in March to renewed fears of an economic hard landing. Overall, the market rose +7.15% in euro currency terms.
- The Hong Kong Chief Executive election held late March along with weak tourism inflows and resultant low retail sales in the first quarter of 2012 halted the rise of the Hang Seng in March (HK$ -5.2%) which had followed two strong months of growth in the year of the dragon.
- After two strong months driven by underlying property performance, the FTSE Straits Times index began to stabilize late in the first quarter with a move from Financials and Industrials to Consumer Discretionary as the sector leaders.
- Japan was a stand-out of the bourse indices with Nikkei 225 gaining +19.3% in local currency terms. The weaker yen boosted corporate earning prospects.
- The Kospi rose around 12% during the first quarter, buoyed by heavy net purchases by foreign investors. Cyclical sectors such as shipbuilders, energy & chemicals and steels led the market growth. Expectations of improvements in the European debt situation added to the positive growth.
Source: J.P. Morgan's Investment Analytics & Consulting group, J.P. Morgan Equity Research, Morgan Markets, Bloomberg and Rimes.
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