| By Andrew Farmer and Simon Senior
andrew.e.farmer@jpmorgan.com and simon.senior@jpmorgan.com
AS OF DECEMBER 2012
European Indices
All quotes in Euros
Commentary
The Eurozone debt crisis which has dominated the investment landscape seemed to recede with the MSCI Europe Index returning 4.4% for the fourth quarter of 2012. This re-bound was partially attributable to repeated reassurances from the European Central Bank (ECB) that it stands behind the euro and also the progress it is undertaking on the creation of a eurozone banking union.
Asian Indices
All quotes in Euros
Commentary
- The ASX200 index posted a gain of AUD 6.0% in the fourth quarter of 2012 driven by the strong performance Healthcare (AUD +11.2%) and Utilities (AUD +11.4%) sectors.
- MSCI China gained 5.0% in December 2012 and 19.0% in 2012 overall, outperforming the MSCI Emerging Markets Index return by 4.0% for the year. This yearly outperformance was concentrated between September and December 2012 as economic growth, profit growth and margins are finally beginning to stabilize.
- The Hong Kong equity market had a strong run towards the end of 2012 with the Hang Seng index rising to a 16 month high on December 28, 2012. This was based upon positive Chinese economic data, although U.S. budget uncertainty continued to weigh on market sentiment.
- The FTSE Straits Times index rallied in the last two months of the fourth quarter of 2012 taking cues from positive Chinese economic activity. This year-end recovery was also driven by the strong performing Consumer Discretionary sector.
- The Japanese stock market performed strongly for the fourth quarter of 2012 with the TOPIX up 16.7% in local currency terms.This was driven by recent political elections which are embarking on a policy of re-inflating the economy and forcing the Bank of Japan to work closer with the government on monetary policy objectives.
- The Kospi index saw three months of volatile activity during the fourth quarter of 2012 with volume and market turnover still at depressed levels. The Korean equity markets reacted to poor corporate results for the third quarter 2012 earnings season, in which 70% of companies missed earnings targets. In addition, general concerns over Korea's export-driven growth model resurfaced.
Source: J.P. Morgan's Investment Analytics & Consulting group, J.P. Morgan Equity
Research, MorganMarkets, Bloomberg and Rimes.
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