2012 saw a surprisingly strong upward movement in share prices on international stock markets. The price gains were mainly the result of expansive central bank monetary policy that led to historically low interest rates, thereby making equity investments more attractive.
2012 began with price gains and a general reduction in market volatility. At the beginning of the 2nd quarter, however, the debt crisis in several European countries again became the centre of attention, causing renewed market concerns and significant price corrections. A positive counterreaction did not begin until June, after extensive cutbacks had been secured in Greece, and the European Union had shown it was able to act in spite of a change in government in France. An interesting difference in market trends could be observed after this point in time. European markets showed an upward trend that continued almost without interruption until the end of the year – albeit with high volatility at times. In the USA, however, this upward trend was abruptly broken after the presidential elections at the beginning of November when a stalemate was encountered in the budget restructuring process and built-in cutback mechanisms made it appear possible that the USA could fall into recession. This correction caused the US Dow Jones Industrial (DJI) index, which increased by 7.3% between the end of 2011 and 2012, to be one of the poorer performing indices in 2012. The DJI, however, ended the year at a level of 13,104.4 points, which was much closer to its level before the outbreak of the crisis in 2008/09 than, for example, the Eurostoxx 50 or Nikkei 225 indices.
In Japan, on the other hand, the elections in December 2012 changed the previously listless price trend into a price explosion. The Nikkei 225 index ended the year at a level of 10,395.2 points, resulting in an excellent double-digit percentage increase for the year (22.9%), but still falling far short of previous highs.
The Euro STOXX 50 closed the year at a level of 2,635.9 points, which represents an increase of 13.8% for 2012, though also still falling far short of historical highs, but performance in Europe was by no means homogeneous. Weak market performance in the problem peripheral countries of Southern Europe contrasted with performance that brought other country indices close to their historical highs (such as the DAX in Germany).
Prices kept up well in emerging markets stock markets in 2012. The MSCI Emerging Markets Index rose by 15.1%. This was, however, significantly outperformed by the European emerging markets in Central, Eastern and Southeastern Europe, where the Eastern European CECE Index in EUR rose by 25.7% year-over-year.