Major global equity markets closed the year 2022 with more losses and fewer gains in major stock indices. As of the close of trading on December 30, the Shanghai Composite Index rose 0.51% to 3089.26 points; the Shenzhen Stock Exchange Index rose 0.18% to 11,015.99 points; and the Growth Enterprise Market Index fell 0.11% to 2,346.77 points. So far in 2022, the Shanghai Composite Index is down 15.13%, the Shenzhen Stock Exchange Index is down 25.85% and the GEM Index is down 29.37%. It was ranked 10th, 15th and 17th among 20 major stock indices.
Data source: Wind data
The global perspective, in the context of the ongoing conflict between Russia and Ukraine, central banks generally raise interest rates to deal with high inflation, the world’s major stock indexes also underperformed this year, down more than up less. wind data show that Russia’s RTS index fell nearly 40%, the bottom of the global major stock indexes in the annual performance; Brazil’s Ibovespa index to 4.69% increase in the first place.
In the U.S. stock market, after a three-year-long bull market, along with the Fed’s aggressive rate hikes and concerns about the U.S. recession, all three major U.S. stock indexes closed lower in 2022. Among them, the Dow closed the year down 8.8%, down more than 10% from its historical high at the beginning of the year; the Nasdaq fell 33.1%, down about 35.4% from the previous year’s high; the S&P 500 fell 19.4%, down more than 20% from its high at the beginning of the year.
Data source: Wind data
In 2022, inflation reportedly reared its ugly head and global stock markets lost a fifth of their value, making it the worst year since the financial crisis. With central banks in many countries rushing to curb rising consumer prices by raising interest rates, bonds fell 16% in 2022, resulting in the biggest drop since at least 1990. Hit by multiple adverse factors such as recession fears caused by the Fed’s continued rate hikes, the Russia-Ukraine conflict, supply chain tensions and soaring inflation, U.S. stocks recorded their worst annual performance since 2008 in 2022. Among them, the annual decline of the Nasdaq is the fourth largest in history, after 2008, 2000 and 1974.
Star technology stocks were “bloodbath”. Tesla led the decline, down 65.03%, the worst annual performance since the company went public in 2010. In addition, Amazon and Nvidia fell about 50%, Google and TSMC fell nearly 40%, and Apple and Microsoft fell more than 20%.
In Europe, the market recorded the largest annual decline since 2018. The European Stoxx 600 index sank 12.8% for the year, and the stock index fell a cumulative 13.2% for the year in 2018. The UK’s FTSE 100 index edged up 1.2% year-to-date, with the FTSE 250 index, which focuses more on UK-based companies, sliding 19.5% cumulatively this year, the biggest annual decline since 2008; France’s CAC 40 and Germany’s DAX index fell 9.5% and 12.5%, respectively, over the same period.
Asia-Pacific major markets, India SENSEX30 and Singapore Straits Index rose more than 4%, Australia’s S&P 200 index fell more than 5%, the Nikkei 225 index fell 9.37%, Taiwan-weighted index and South Korea’s composite index fell 22.4% and 24.89%, respectively. Vietnam’s stock market, which was on a high last year, also lost its halo this year, with the VN30 index falling 33.85% during the year.
The Hang Seng Index fell 15.46% for the year 2022, similar to the SSE. Hong Kong stocks have been under pressure since the beginning of 2022, mainly due to the sluggish investment climate caused by the geopolitical tensions between Russia and Ukraine, the Fed’s continued interest rate hikes, coupled with the recurring epidemic and the weak real estate market. The Hang Seng Index and the Hang Seng China Enterprises Index fell 15.5% and 18.6% respectively in 2022, while the Hang Seng Technology Index fell 27.2%.
Among the 76 Hang Seng Index constituents, 24 rose in 2022. Sands China Ltd (01928.HK), China National Offshore Oil (00883.HK) and Seabed (06862.HK) are the best performers, up 42.6%, 37.4% and 32.4% respectively this year.
Looking ahead to the global capital market in 2023, GF Securities pointed out that the end of the current Fed rate hike cycle is close at hand and many major asset classes are about to reach a significant inflection point. The agency judged that in the vicinity of the Fed’s last rate hike, the world’s major stock indexes will usher in a “bottoming out” around the time of the Fed’s last rate hike, so most of the world’s major stock indexes are expected to improve in the first half of 2012 at the latest. At that time, emerging markets are more resilient than developed markets.
Nomura Eastern International Securities said, in the background of the optimization of prevention policies and stimulus policies to increase the number of economic cycle recovery is expected to quickly rekindle, A shares ultra-low valuation has become a strong guarantee of future long-term returns.
UBS Asset Management pointed out that global market liquidity continues to tighten and asset price volatility will remain at a high level. The dollar downtrend should gradually establish and then stabilize and rebound. The Fed’s sharp rate hikes are in the process of peaking. Central banks in developed countries will maintain a hawkish tone for a longer period of time, limiting the upside for equities. The resilience of the U.S. economy and China’s economic recovery will provide bottom support. U.S. equity risk premiums have plunged and global equities are entering a shock. Investing in bonds is less risky and higher yields are more attractive. The value of global fixed income has increased, and investors do not have to overly pursue credit sink to get good returns.
