S&P : A Bleak August for Emerging, Developed Equities

Standard&Poor’s said Tuesday the world’s emerging and developed equity markets posted negative returns in August, with emerging markets dropping 1.94% and developed markets giving back 0.36% over the month.

According to an S&P news release, both emerging and developed markets continue to remain in positive territory for the 12-month period ending in August, with returns of 46.6% and 17.94%, respectively.

“World equity markets were rattled by concern over liquidity in August, as the anxiety over the U.S. housing market proved that all markets are connected,” said Howard Silverblatt, Senior Index Analyst at Standard & Poor’s, in the news release. “In addition, volatility returned in August with the S&P 500 posting changes of at least 1% for 12 of its 23 trading days – a rate not seen since 2002.”

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In August, 23 of the 27 developed equity markets posted negative returns. Finland (+4.46%), Luxembourg (+2.44%), Slovenia (+9.41%) and the United States (+1.56%) posted the only advances for the month. The three-month returns ending August were equally poor, with 20 of the 27 countries in negative territory, with an average weighted loss of 3.04%.

However, 12-month returns were positive with all countries except for Japan (0.84%) posting double-digit gains, S&P said.

Emerging equity markets were also hit hard in August, with 22 of the 25 countries reporting losses. Columbia (11.64%), Pakistan (10.46%) and Peru (10.44%) all reported double-digit losses.

Three-month returns were positive with 15 countries posting gains (average +7.15%) and 10 countries giving back territory (average -4.48%). The 12-month returns were also positive for emerging markets, with a reported average gain of 45.04%. Jordan was the sole decliner with a twelve-month loss of 11.97%.

Only five of the ten sectors posted gains in August, led by Telecommunications Services at 3.22% and Health Care at 1.48%. Communications Equipment led the sub-industries with a 4.59% gain, followed closely by Office Equipment (+4.57%) and Water Utilities (+4.54%), S&P said.

More information is at www.standardandpoors.com/indices.