Global stocks have enjoyed their second-strongest start to a year since 1998, says Cormac Mullen on Bloomberg. The MSCI All Countries World index rose by 11% during the first six months of the year, second only to a 15% gain in the first half of 2019. “The global stock benchmark closed at a record on 28 June, and has risen almost 90% since its pandemic low in March 2020.”
America’s benchmark S&P 500 index enjoyed yet another strong half, gaining 14.4%, while the FTSE 100 rose by 10.9%. The rally in value stocks was not enough for the FTSE to outperform the US index, but the FTSE Small Cap index, which tracks smaller listed companies, has been a happier hunting ground, as Laith Khalaf of AJ Bell points out.
The index has “repeatedly set new record highs” and has gained 19.4% so far this year. Smaller businesses are more exposed to the re-opening domestic economy than the big blue-chips.
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Asian stocks had a more muted first half. Japan’s Topix gained 8.3% but a weaker yen eroded those returns for British investors. China’s CSI 300 index was virtually flat.
There were some Asian bright spots, says Eustance Huang on CNBC. Vietnam’s VN index surged by an impressive 27.6% in the first half. Taiwan’s Taiex (up 20.5%), South Korea’s Kospi (14.7%) and India’s Nifty 50 (12.4%) also turned in solid performances.
Markets have been unusually placid during the last six months, says Dominic Coyle in The Irish Times. So far, the S&P 500’s “biggest peak-to-trough pullback in 2021 was a mere 4.2%”. That might not last. Still, data from LPL Research shows that a “strong first half of the year is usually followed by a strong second half... What goes up” will not necessarily “come down”.
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