Global markets for virtually all asset classes, from stocks to commodities to real estate to bonds, saw a significant decline in 2008-09. Especially, European equity markets were badly hammered, compared with their American and Asian counterparts, during the year.
The MSCI World markets index plunged by 43.98 per cent on fears of a global economic contraction. The MSCI European market index declined by 43.82 per cent, whereas the MSCI Asia Pacific index fell by 41.92 per cent and the MSCI American index nosedived by almost 40 per cent. In 2008-09, all major global indices declined between 35 and 45 per cent.
The Dow Jones Industrial Average index touched a 12-year low, while the FTSE 100 and NASDAQ hit a six-year low. Among Asian indices, while the Sensex hit a three-year low, the Hang Seng touched a 13-year low during the last financial year. Non-US equity markets fared even worse with the MSCI EAFE (developed markets) index declining by 48.19 per cent and the MSCI Emerging Market index falling by 50 per cent.
All the MSCI sectoral indices, which monitor the performance of stocks from around the world, were down. The worst performer was the financial sector, which declined by almost 61 per cent, while the least affected was the healthcare sector, which fell by only 24 per cent in 2008-09.
The MSCI Materials index declined by 51.55 per cent during the year under review. This index includes companies involved in chemicals, construction materials, containers, packaging, metals, mining, paper and forest products. On the other hand, the MSCI Consumer Discretionary index was down by 42 per cent.
This index is made up of manufacturing and services industries -- such as automotive, apparel, leisure equipment, hotels, restaurants and consumer retailing -- that tend to be the most sensitive to economic cycles.
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Global market cap
Globally, the value of stocks plunged by $24.45 trillion, or 45.70 per cent, to $29.81 trillion as on March 31, 2009. At the same time, the value of stocks in the US declined by $6.35 trillion (40.38 per cent) to $9.38 trillion, while the same in the UK fell by $1.80 trillion to $1.77 trillion.
Among the Asian markets, the Indian market was the worst hit, registering a $668 billion, or 53 per cent, drop in the market capitalisation of companies whose stocks are traded on various exchanges. The combined market capitalisation of these companies went down from $1.26 trillion on March 31, 2008 to $607 billion at the end of 2008-09.