| By Andrew Farmer and Simon Senior
andrew.e.farmer@jpmorgan.com and simon.senior@jpmorgan.com
AS OF SEPTEMBER 2012
European Indices
All quotes in Euros
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Commentary
The European stock markets had a slow start to the third quarter of 2012. The 0.25% rate cut from the European Central Bank in early July
had little impact on equity markets. Meanwhile, fears of a U.S. double-dip recession and structural slowdown in Chinese growth continue to
concern global investors. European stability is making progress with proposals to create a single banking authority with the power to force
recapitalization, mergers and to close irredeemably bad banking institutions. In this environment, the eurozone equity markets responded
with MSCI Europe returning 7% in local currency over the period.
Asian Indices
All quotes in Euros
Commentary
- The Australian ASX200 index rose AUD 7.1% in the third quarter
of 2012. With the rising AUD (+1.4% vs USD) the ASX index had
a better third quarter than its U.S. counterpart, the S&P 500, for
the first time since the third quarter of 2010. Banks, staples and
healthcare were the primary outperforming sectors.
- The Chinese economy grew at 7.4% in local terms within the third
quarter of 2012.
- The Hong Kong equity market continued to be extremely volatile
at the start of the third quarter of 2012 as slower global economic
growth and the European debt crisis weighed on market sentiment.
Hong Kong then rebounded to a four month high as the U.S.
announced its additional quantitative easing measures and further
anticipation of monetary easing from China.
- The FTSE Straits Times index had a volatile third quarter of 2012
but began to stabilize late in the quarter driven by the strong
performing Industrials sector.
- The Japanese stock market was the only major stock market to fall
in the third quarter of 2012 (-0.9% in EUR terms) as the Japanese
economy appeared at risk of falling into recession. The Bank of
Japan announced further quantitative easing measures with the
intention of bringing down yields to help boost asset prices and
growth.
- The Kospi index saw three months of growth during the third
quarter of 2012 (EUR 8.6%) buoyed in September by the U.S.
Federal Reserves quantitative easing announcement and S&P
upgrading Korea's credit rating.
Source: J.P. Morgan's Investment Analytics & Consulting group, J.P. Morgan Equity
Research, Bloomberg and Rimes.
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