A great deal has been said in the media about the performance of stock markets during 2008, and also about the reversal of fortune since the lows of November 20. After $30 trillion was wiped out from world equities during 2008, stock markets closed the year with a few up-days (albeit on thin volume).

If nothing else December was a month of recovery for many markets. Although few stocks markets had significant movement, volatility, a key issue for 2008, fell substantially over the month.


Global market view: The returns in the table below are given in the local currency of the various countries for different measurement periods ended 31 December.


Although developing markets have outperformed mature markets from the bull market highs of October 2007, the picture has changed since October 2008, as seen from the declining trend of the relative-strength graph of the MSCI World Index versus the MSCI Emerging Markets Index. This may be an early indicator of investors returning to riskier assets, or just a short term blip.


Notwithstanding the rallies since the troughs of November 20, all global stock markets were still massively down by year-end from their respective bull market highs, as well as since the start of 2008.

The worst performers since their peaks were Ireland (-76.5%), China (-70.2) and Russia (-68.2%). The 2008 performance of some of these countries is shown in the graph below.


With the indices of a number of individual countries having breached the 50-day moving average (and after year-end also having taken out the December peaks), the next target is the November 4 highs, followed by the key 200-day average. On the downside, the December 1 and the all-important November 20 lows must hold for the uptrend to remain intact. Source: NAB