World equity markets bounce back in April: S&P
09 May 2008
Developed and emerging markets have recovered lost ground on impressive gains, says rating agency Standard & Poor's, adding that world's developed and emerging markets "shook off a fear-provoking month of March with impressive returns in April."
According to Standard & Poor's monthly global stock market review, The World by Numbers, developed markets posted a 5.15 per cent gain in April after losing 8.95 per cent in March. Likewise, emerging markets climbed 7.49 per cent in April after falling 5.11 per cent the month before.
"Global equity markets reversed direction in April as optimism prevailed based on the hope and belief that the world, and especially the United States, is near the bottom of the problems facing the credit market," says Howard Silverblatt, senior index analyst at Standard & Poor's.
Developed world markets gained 5.15 per cent in April versus a loss of 8.95 per cent in March partially due to higher returns by Japan (+6.61 per cent ) and the United Kingdom (+5.85 per cent ). Twenty-four of the twenty-six markets were up for the month, with only slight losses posted by both Finland (-1.34 per cent ) and Denmark (-0.21 per cent ). While April produced only one double-digit developed market gain (Norway, +11.25 per cent ), the lower returns were accompanied by lower volatility.
After posting a 5.11 per cent loss in March, emerging markets reversed direction and posted a strong 7.49 per cent gain in April. Double-digit gains were posted during the month for both China (+15.10 per cent after declining 12.36 per cent in March) and India (+11.49 per cent versus -12.35 per cent in March).
In all, six of the 26 markets posted double-digit gains, with 16 markets increasing and ten declining. Turkey rebounded from its 20.09 per cent loss in March to lead all markets with a 15.75 per cent gain in April.
All 10 sectors posted gains in April, an event not seen since October 2007 when many markets posted record high equity values. Energy profited the most in April posting a 12.05 per cent monthly gain, with Materials (+6.61 per cent ) also strong during the month. Financials (+6.64 per cent ) rebounded during the month, but still remain off for the year (-16.03 per cent ). Consumer staples performed the worst, posting a slight gain of 0.44 per cent .
Growth stocks (+5.67 per cent ) outperformed Value (+4.61 per cent ) for the month of April. The variance, however, was much wider in the Asian-Pacific markets where Growth prospects looked better and produced a 9.00 per cent increase versus 4.99 per cent for Value. The trend was also noted in Japan (Growth +14.83 per cent , versus Value +5.79 per cent).
