China, India & U.S. stock markets compared

[SpArK]

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China, India & U.S. stock markets compared

Where do stocks in the U.S. and other countries stand today compared to the high points reached before the financial panic of 2008? And, which troubled country is actually up right now? With all the hourly and daily market movements, it’s easy to miss the bigger picture, which is divergence at home and abroad. More on that in a moment.

Let’s first go to the charts all of which are from the folks at Bespoke. The first compares stocks in 22 countries to their highs before the financial panic. I suspect many of you are surprised at the outliers — China and Mexico. China, of course, has been the worst performer and Mexico the best. Go figure:

Source: Bespoke Investment Group

U.S. stocks are about in the middle of the pack as shown by the blue bar. Mexico (green) is all by itself in positive territory, followed by India, Malaysia and Brazil. Given the terrible stories emanating from Mexico these days, the stock market results are probably quite surprising.

The next two charts show some country pairings that are also surprising. Here you can see the progress made at the two best-performing countries, Mexico and India from 2007 to the present:

Mexico has actually slightly beaten the previous peak which was in late 2007. India is approaching its high point from late 2007 and early 2008.

This next chart might surprise you a bit too as it compares U.S. stocks to stocks in China:

Source: Bespoke Investment Group

U.S. stocks are still 27% below the peak reached way back in 2007. However, that performance looks pretty good compared to China. The Shanghai Composite (China’s largest stock exchange) is down 56% from the 2007 peak.

Another very interesting point is to look at the divergent paths taken by the so-called BRIC countries, which are Brazil, Russia, India and China. Brazil -4%, Russia -38%, India -2% and China -56%. Now, that’s divergence.

Given all we have heard about emerging markets being the world’s growth engines, it’s important to keep in perspective the fact that these are still separate and unique countries with many different trends and factors that affect stock valuations locally. I hope these charts help you do that.

[Nomenclature]

The author of this article is simply ignorant. The Chinese stock market crash happened well before the global financial meltdown and has nothing to do with it.

Chinese stock market is essentially a closed system, players in that system don't give a damn about the world economy. So people should stop comparing it with other markets.

[mike05]

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Strange the author did not include the Hang Seng Index which the world market have a bigger influence on.