These Stock Markets Are Soaring

In the first half of 2016, the stock markets of emerging countries were immensely successful.

These countries included Russia, Pakistan, Brazil, and Argentina.

This success, however, was not an all around phenomenon.

Unfortunately, Italy suffered a large decline, partly due to the concern associated with the European country’s banking district.

This chart, tracked by Dow Jones, shows how different countries performed by both regional and national stock market indices.

The chart is in local currency terminology.

While the top ten include Canada, Russia, Argentina, Pakistan, India, and Bovespa, the lower region of the chart shows the decreased performance from Italy, Japan, China, and Spain.

As you can see, Argentina is at the top of the list, for good reason.

When President Mauricio Macri came to office in December, it led to a revival of its Merval index MERV, +2.92%.

According to the International Monetary Fund, it is expected that Argentina’s economy will shrink around 1% in 2016 before expanding 2.8% in 2017.

Macri managed to eliminate most of the capital controls and is now moving to form a deal with creditors.

He wants to use this to help dispel negativity that has hung over Argentina since the 2001 default.

MSCI, an index provider, claimed in June to be starting a year long review to determine whether to promote Argentina from frontier-market index to emerging market status.

One country that is not on the chart is Peru.

After their S&P/BVL General Peru index increased almost 40% during the first half of 2016, it was determined that Peru would be retained in MSCI’s emerging-market index.

Stocks in the United States endured a chaotic first half but were up slightly when they ended.

The stocks fell flat in the first few weeks of 2015, rebounding after dropping to their lowest in February.

Due to Brexit in the United Kingdom, shares in the United States and Europe plummeted once again last Friday and Monday.

However, this was trailed by a rebound.

The S&P 500 SPX, +0.19% concluded the beginning half of 2016 around 2.7% up from where it was at the end of 2015.

In other news, the FTSE 100 UKX, +1.13% shot past the pre-Brexit top and concluded the first half with an increase of 4.2%.

The gain decreases in impressiveness, at least in dollar terms, because the pound plunged after the Brexit vote, which determined whether or not Britain would leave the European Union.

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Unfortunately, not all of the European equity markets saw success.

For some, the first half was rough.

In particular, Italy saw the FTSE MIB l945, +0.61% suffer a drop of over 24%.

There was concern over the banking sector in Italy, which is said to have contributed to this drop.

Asian shares also had a rough first half.

Major Japanese and Chinese indexes posted double-digit percentage losses.

The yen, though it was being strengthened USDJPY, +0.10% and expanded monetary reaction from the Bank of Japan, did not help the Japanese stocks. 

This yen increase was about 17% versus the dollar year to date.

The Nikkei 225 NIK, 0.34% was also off by over 18% in the first half of 2016.

A few other notable numbers from the graph from Dow Jones include Global Dow’s -1.07% and RTS Index (Russia)’s +22.95%.

In conclusion, the index from Argentina was at the top of the list for stock markets of the first six months of 2016 and Italy plummeted with a large lag behind other countries.

As you can see in the graph below, Italy is just not doing too well in general.

Italy, along with Japan, China, and Spain, suffered during the beginning of this year.

Brexit caused quite a commotion regarding the stock markets after the value of the pound decreased more than it has in the last three decades.

The United States, in particular, is trying to steady Wall Street after struggling with harsh losses in response to Britain leaving the E.U.

2015 was a tough year for emerging markets, but studies are showing that 2016 could be less brutal and offer more success.

Hopefully, Europe and Asia will catch up to Argentina and Russia in the next half of 2016.