COVID-19 has had a devastating effect on stock markets around the world, but as some begin to recover, EXANTE senior analyst, Viktor Argonov looks at which markets are recovering quicker than others, such as the Euro Stoxx 50 index.
Euro Stoxx 50 Index vs North American Index
The general state of the economy in the EU, shown by the Euro Stoxx 50 index, is worse than for any North American index.
In his book, The Dhandho Investor: The Low–Risk Value Method to High Returns, Mohnish Pabrai coined an investment approach known as "Heads I win; Tails I don't lose much." Q3 2021 hedge fund letters, conferences and more The principle behind this approach was relatively simple. Pabrai explained that he was only looking for securities with Read More
However, a lot can be learnt from countries such as Switzerland and Germany, which have nearly recovered, with their indices being only 3% below the level they were at the beginning of the year.
The UK may on the other hand is in deep recession, and Italy and France are still suffering with their indices still 15-19% lower than their January values.
Nevertheless, it seems that Global markets as a whole are on the upward trend. The Global Dow index best reflects the average state of the global economy has almost returned to where it was in January after dropping by 35% as a result of the crisis. But its value is still 8% less than at the beginning of the year and 10% less than the pre-crisis maximums shown during the winter. The economies of individual countries are best compared to Global Dow (whether any specific parameter is better or worse).
This rating lists the indices of the leading trading platforms of the world's largest economies, as well as the Global Dow index, the European Union's Euro Stoxx 50 index, and the indices belonging to small but rich countries by GDP per capita: Switzerland, the UAE, Australia, and Saudi Arabia.
The data is listed for the end of July.
|region||country||index||Dec, 30||Max in Jan-Feb||Min in March||Jul, 29||July, 29 / Dec, 30||Jul, 29 / Max Jan-Feb|
|North America||USA||Nasdaq Composite||9021||9731||6880||10402||+15%||+7%|
|East Asia||China||Shanghai Composite||3040||3116||2660||3273||+8%||+5%|
|East Asia||South Korea||Kospi||2176||2251||1566||2258||+4%||+0%|
|North America||USA||S&P 500||3235||3380||2305||3218||-1%||-5%|
|East Asia||Japan||Nikkei 225||23657||24041||16553||22428||-5%||-7%|
|North America||Canada||TSX Composite||17099||17944||11228||16169||-5%||-10%|
|East Asia||India||NIFTY 50||12256||12362||7570||11263||-8%||-9%|
|North America||USA||Dow Jones||28635||29398||19174||26379||-8%||-10%|
|West Europe||EU||Euro Stoxx 50||3691||3865||2386||3304||-10%||-15%|
|West Asia||Saudi Arabia||TASI||8345||8475||5960||7459||-11%||-12%|
|East Asia||China (Hong Kong)||Hang Seng||28451||29056||22805||24802||-13%||-15%|
|West Europe||Italy||FTSE MIB 40||23506||25478||14470||19903||-15%||-22%|
|West Europe||France||CAC 40||5982||6111||3755||4929||-18%||-19%|
|West Europe||Britain||FTSE 100||7587||7675||4994||6128||-19%||-20%|
|West Asia||UAE||DFM General||2770||2863||1682||2063||-26%||-28%|
North America and East Asia
These show the best recovery rates. In particular, the Nasdaq Composite and Shanghai Composite indices, as well as the South Korean Kospi index, have fully recovered from their crash during the crisis, and even surpassed the levels shown at the beginning of the year. The reasons for this are obvious. The pandemic in East Asia began earlier, but the measures taken were swift and effective. The countries in North America took a worse hit from the pandemic, but they turned out to be economically powerful enough to keep the indices high. As for Nasdaq Composite, it enjoyed an especially privileged position as it included many IT giants that remained in high demand during the outbreak.
Euro Stoxx 50 index Vs Eastern Europe Stocks
Represented by Russia in the table, as the situation there has many unique features. Its economy is recovering at a slightly above average rate, and its index is only 5% lower than at the beginning of the year – along with Japan and Canada, which have also fared relatively well.
The situation is at its worst in other regions: West Asia, Oceania, and South America. Out of all countries listed from these regions, only Turkey is in the upper half of the rating, as it has already exceeded the level shown at the beginning of the year by 4%, and is only 1% below the pre-crisis maximums. Things are at their worst in countries such as the UAE and Indonesia: -19-26% compared to the beginning of the year, and -19-28% compared to pre-crisis maximums.