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GLOBAL EQUITIES (EXCLUDING U.S.)
As of January 2009

by Simreet Gill
J.P. Morgan Investment Analytics and Consulting
simreet.k.gill@jpmorgan.com

Source: J.P. Morgan Investment Analytics & Consulting, Bloomberg, Rimes

After record losses in 2008, European equity markets started the new year on a better tone, as most indices continued their December rally in early January. But investors quickly caught up with reality when the first 4Q08 earnings to be reported came out well below consensus expectations. (Morgan Markets)
On top of poor earnings delivery and miserable corporate guidances, the macro momentum remained poor. The improvement observed in a number of key leading indicators in January failed to carry on in February, while new concerns about banks bailed out by governments emerged. In this environment, Financials stocks significantly underperformed the market during the first two months of 2009, while cyclical sectors such as Materials or Capital Goods delivered on average better performance than their defensive peers. (Morgan Markets)

Australia, Hong Kong & Singapore

Korean (KOSPI)

	Japan (Nikkei 225)

Despite the dismal start of the year for global equities and commodities, emerging equity markets are flat through January in local terms, and only down a few percentage points in USD terms, denying their past sensitivities to these two drivers. Signs of stabilization in Chinese activity data and strong stimulus measures are reducing the main concern that investors had for the asset class. (Morgan Markets)
After starting the new year on a positive note, the Australian market retreated to record a 4.9% decline for January (S&P/ASX200). Financial sectors were hit by continuing problems in the banking systems of the US and Europe and their possible implications for the capital requirements of Australian banks. The Banks index lost -9.2% and Real Estate -9.7%. Despite weak economic news, Resources stocks performed better than the market (-1.7%) with the help of a resilient performance by BHP. (Morgan Markets)