World Markets Slip in February
Returns in Latin America were mixed, with Brazil, February’s best performing market, surging 14.5%, on a positive economic outlook and a potentially more liquid stock market pending the elimination of a trading tax.
Venezuela performed best in local currency terms, but ranked close to bottom in dollar terms, losing -13.36% following the float of the Bolivar.
Currency concerns plagued other Latin countries – in Argentina the market fell by -13.24% as the peso continued its slide against the dollar.
The US disappointed investors once again, falling by 2%.
In February, four out of the five worst performing stocks globally were domiciled in the US as investors questioned accounting methods, valuations and the outlook for profits – these were Enterasys Network, AES Corp, Extreme Networks and Computer Associates.
Returns in the Middle East reflected the region’s volatility, with Israel falling by -8% as violence continued to destabilize the country.
Meanwhile, Pakistan and Egypt were among the region’s best performers, increasing by 12.01% and 9.56% respectively.
Elsewhere in the region, Turkey, falling 20%, was the world’s worst performing market in dollar terms, news of an IMF loan package failing to offset inflation rate concerns.
In Asia, Korea and Thailand were among the top performers, the former increasing 9.12% as global demand showed signs of strengthening, while the latter benefited from a more supportive interest rate environment.
Japan increased by 4% in both US dollar and local currency terms, its banking sector given a boost by speculation that the government would bailout beleaguered financial institutions.
Tech Slump
In terms of sectors, new economy stocks took another beating in February, Information & Technology Hardware falling by 13.06%, Software & Computer Services losing -8.57%, and Telecommunication Services sliding by 5.17% as valuations came under fire.
February belonged to cyclical stocks, with Engineering & Machinery stocks increasing by 6.36% and Forestry & Paper up by 6.29%. Once again Aerospace & Defence was in the top five performing sectors, increasing 5.87% as the US continues to bolster the country’s military.