Nearly All World Equity Markets Lost Ground in May

June 7, 2006 ( - According to the S&P/Citigroup Developed World Index, May was the first month, after four consecutive months, that the index posted a loss.

According to Standard & Poor’s global stock market review, The World by Numbers, with the exception of Iceland and Slovenia, every developed country equity market lost ground, and the only sector to show even a modest gain was Utilities, at 0.92%.

The previous top sector performers, Energy and Materials, fell 3.14% and 3.78% respectively during the month, according to a release.

According to Nicholas Aninos, a Standard & Poor’s analyst, the disappointing returns were a result of markets bracing for higher interest rates and slowed economic growth, thus allowing for “limited ways, if any, to generate positive returns” he added.

Amid the declines, investors across the globe preferred the relative safety of larger-cap stocks to the more volatile smaller-cap issues, with the S&P/Citigroup Primary Market Index (PMI) falling 3.30% in May versus a decline of 4.49% for the smaller-cap S&P/Citigroup Extended Market Index (EMI), the release said.

On an individual country basis, the US, UK, Japan, France and Germany saw the larger-cap PMI outperforming the smaller-cap EMI.

The emerging market index also took a dip, with a fall of 10.28%, a negative impact that was only amplified by emerging market currencies falling against the US dollar in May, according to the release. Performance of emerging market countries ranged from a 6.43% gain in Nigeria to a 17.49% drop in Columbia.