'Indian stock market among world’s worst'

New Delhi: Indian stock market has emerged as one of the worst performers globally in the first three months this year, with concerns of a possible slowdown in the US economy and surge in commodity prices impacting sentiments of emerging and developed equity markets, a report says.

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According to a monthly review by global index provider Standard & Poor's, the world's emerging and developed equity markets were hit hard during the first quarter of 2008, losing 10.56 per cent and 8.95 per cent respectively, during the period.

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"Near record commodity prices, 10-year US Treasury rates approaching their lowest level, a struggling dollar, and the potential global impact of a perceived US recession all fuelled market volatility and uncertainty during the first quarter," S&P's senior index analyst Howard Silverblatt said.

Among the emerging world equity markets, 15 of the 26 countries lost ground during the January-to-March quarter this year with India, China and Turkey emerging as the worst performers.

During the first three months in 2008, Indian equity market lost 28.55 per cent, while China and Turkey witnessed a fall of 24.65 per cent and 36.62 per cent respectively.

However, emerging markets which managed to give positive returns despite the global concerns, include Pakistan, Morocco and Chile, which emerged as some of the best performers during the first quarter of this calendar year.

Pakistan stock market has provided a return of 10.25 per cent in the reviewed period, Morocco performed robustly giving gains of 23.81 per cent and Chile gave 8.5 per cent positive returns, the S&P monthly global stock market review said.

In March, only 10 of the 26 emerging markets gained, producing a weighted decline of 5.11 per cent and an average increase of 3.44 per cent. The variance is due to the BRIC countries (Brazil, Russia, India and China) that represent 50.6 per cent of the market value. Brazil that accounts for 15.3 per cent of the emerging market value witnessed a loss of 7.99 per cent in March. While, both India (commanding 8.4 per cent of the market value) and China (cornering 14.8 per cent) lost 12.4 per cent in the month each. Russia witnessed a marginal drop of 1.60 per cent.

For the quarter as well, the BRIC countries showed notable losses. India reported a 28.6 per cent loss, against a gain of over 80 per cent in 2007. While China was down 24.7 per cent for the quarter compared to 69.8 per cent in 2007, Brazil, which was up 79.6 per cent last year, fell 5.5 per cent for the quarter. Russia dropped 11 per cent in the first quarter of 2008, the report added.

While monthly and quarterly performances were mixed for the emerging markets, 12-month returns remain strongly positive with 13 of the 26 markets still boasting an annual return in excess of 25 per cent with only South Africa (-6.98 per cent) and Turkey (-3.11 per cent) in negative territory.

In the 12-month period ended on March 31, Indian market have gained 31.56 per cent, China returned 29.57 per cent. Brazilian market returned over 57 per cent and Russian had given 13 per cent in the one year period.

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In terms of the various sectors, eight of the 10 posted losses in March, with only the Industrials (0.19 per cent) and Consumer Staples (2.65 per cent) sectors posting gains.

Among others, telecommunications declined 4.30 per cent followed by materials (3.77 per cent) and health care (3.21 per cent).