Think the US market is bad? Try China

The Shanghai Composite Index is down 23% since peaking in November. Markets in Brazil, India and Japan are down for the year as well.

By Charley Blaine May 17, 2010 1:53PM
Exchange floor © Zurbar/agefotostock Yes, the U.S. stock market is pulling back -- and sharply so. But it could be worse.

Ask Chinese investors, where the Shanghai Composite Index lost 5% today and is now down 21.9% for the year. It's also down 23% since peaking in November.

Or investors in Brazil, where the Bovespa Index is down nearly 15% since hitting a closing high for the year on April 8.
Or even Japan, whose Nikkei 225 Index ($JP:N225) has fallen 9.7% since its April 5 closing high and is now down 3% for the year.

Stock markets around the world have been tumbling since the European debt crisis (let's admit it: It's bigger than Greece) truly erupted in April.

Some peaked in early April; the U.S., German and British stock markets all peaked on April 23 or 26.

But they have all fallen pretty much in lockstep; the Shanghai Index's slump is the outlier of the group. The uniformity of the declines are another confirmation about how interrelated financial markets around the world have become.

The Dow Jones industrials ($INDU) are down more than 6% since peaking April 26. The Standard & Poor's 500 Index ($INX) and the Nasdaq Composite Index ($COMPX) are off more than 8% since April 23.

Britain's FTSE-100 Index ($GB:UKX) is off 9.7% since peaking on April 15. Canada's S&P/TSE Composite ($CA:OSPTX), and Germany's DAX Index ($DE:DAX) are the relative  top performers, down 4.6% and 4.2%, respectively, since April 26.

There are some outliers. In addition to Shanghai's slump, Spain's IGBM Index peaked at 1,272.66 on Jan. 6 and is down 24% since, including a 6.6% decline today.

If you're a U.S. investor, there are three things to cheer about in this pullback:
  • The major indexes are still holding onto gains for the year, albeit barely. They can't say that in China, Japan, India, Hong Kong and Brazil.
  • The U.S. market is not yet in a correction. The popular definition is a decline of 10% or more.

 

  • The declines in the U.S. so far still aren't as big as the market declines in late January and early February. Then, the Dow fell 7.6% between Jan. 19 and Feb. 8. The S&P 500 was off 8.1%, with the Nasdaq down 8.4%.
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