| By Andrew Farmer and Simon Senior
andrew.e.farmer@jpmorgan.com and simon.senior@jpmorgan.com
AS OF JUNE 2012
European Indices
All quotes in Euros
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Commentary
European markets posted losses as Europe continues to be dominated by concerns on the continuing sovereign debt crisis. In late June, the
EU summit delivered measures to manage the crisis signaling limited but important progress toward regional integration and burden sharing;
in particular maintaining Spain's and Italy's access to debt capital markets. Spain's IBEX 35 index fell for this period (9.97%) in euro currency
terms as concern mounts over the deepening Spanish recession.
Asian Indices
All quotes in Euros
Commentary
- The ASX200 index dropped AUD 5.6% in the second quarter of
2012, marking the seventh straight quarter of common-currency
underperformance by the ASX index relative to its US$ counterpart,
the S&P500. The major drivers behind the weak performance were
the materials and energy sectors.
- Chinese markets experienced high volatility during the second
quarter of 2012, with renewed concerns on European uncertainties
and the slowing down of the Chinese economy. Only the utilities
sector provided a positive return during the period. The Chinese
Government continues to promote its monetary easing policy,
implementing more proactive fiscal measures to ramp up fixed
asset investments to boost economic growth.
- The Hong Kong equity market saw a volatile second quarter and
declined (HK$ 5.4%), but still remains positive YTD. Ongoing
concerns on the European debt crisis and the Greek elections
continued to weigh on market sentiment.
- Following two months of sustained losses, the FTSE Straits Times
index began to stabilize toward the end of the second quarter,
driven by strong returns in the telecommunications and property
sectors.
- After a strong performing first quarter, the momentum in the
Japanese economy began waning, resulting in a weak second
quarter. The Nikkei 225 dropped 10.67% in local currency terms.
- The Kospi index fell around 9% in local currency terms during the
first two months of the quarter, but steadied in June, buoyed by a
last day recovery of +1.9% as the EU agreed to help the struggling
European banking sector. Domestic institutions continue to be the
major net buyers in the Korean equity market and overall investor
sentiment is turning more cautious.
Source: J.P. Morgan's Investment Analytics & Consulting group, J.P. Morgan Equity Research, Morgan Markets, Bloomberg and Rimes.
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