A strong second half for global stockmarkets?

Global stocks have enjoyed their second-strongest start to a year since 1998 – could the second half of the year be even better?

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. 

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”. 

Recommended

When investors get over-excited, it’s time to worry – but we’re not there yet
Sponsored

When investors get over-excited, it’s time to worry – but we’re not there yet

When investors are pouring money into markets, it can be a warning sign of impending disaster, writes Max King. So how are fund flows looking right no…
26 Oct 2021
An investment trust that gives exposure to frontier markets
Investment trusts

An investment trust that gives exposure to frontier markets

An investment trust investing in small, illiquid emerging markets has disappointed, but deserves another chance, says Max King
26 Oct 2021
What does Rishi Sunak have in store for investors this Wednesday?
Budget

What does Rishi Sunak have in store for investors this Wednesday?

Rishi Sunak is unveiling his spending plans for the economy this week. John Stepek analyses areas which may be most hit by the budget.
25 Oct 2021
How rising interest rates could hurt big tech stocks
Tech stocks

How rising interest rates could hurt big tech stocks

Low interest rates have helped the biggest companies to entrench their positions. But what if rates rise?
25 Oct 2021

Most Popular

Properties for sale for around £1m
Houses for sale

Properties for sale for around £1m

From a stone-built farmhouse in the Snowdonia National Park, to a Victorian terraced house close to London’s Regent’s Canal, eight of the best propert…
15 Oct 2021
How to invest as we move to a hydrogen economy
Energy

How to invest as we move to a hydrogen economy

The government has started to roll out its plans for switching us over from fossil fuels to hydrogen and renewable energy. Should investors buy in? St…
8 Oct 2021
Emerging markets: the Brics never lived up to their promise – but is now the time to buy?
Emerging markets

Emerging markets: the Brics never lived up to their promise – but is now the time to buy?

Twenty years ago hopes were high for Brazil, Russia, India and China – the “Brics” emerging-market economies. But only China has beaten expectations. …
18 Oct 2021