Lehman Brothers Inc collapsed on 15 September 2008 under the weight of sub-prime mortgage crisis of US that started in late 2007. The world’s stock markets spiraled precipitously downwards after that single event. I wrote a blog post comparing stock indices between 2 January 2008 and 24 October 2008 (pre- and post-Lehman Brothers). On average, major stock markets declined 45% since the start of 2008. STI fared worst than this average at 53.7% reduction. See table below.
|2 Jan 2008||24 Oct 2008||7/8 May 2013|
|FTSE 100 (UK)||6,416||3,883||6,560|
|Australia All Ord||6,434||3,831||5,177|
|Dow Jones Ind||13,043||8,378||15,056|
Looking at stock markets in recent days, it seems that investors have put the global financial crisis of 2008/09 behind them.
The Straits Times Index (STI), Nikkei 225, Sensex (Mumbai), FTSE 100 (UK) are now near the levels set at the start of 2008.
The US stock markets are in exuberance mood with Dow Jones Industrial Average, S&P500 and Nasdaq overshooting the levels seen in 2008.
The laggards were Shanghai Composite, Hang Seng Index and Australia All Ordinaries Index. They are still far from the levels set in January 2008. This group seems to be closely linked with the China economy.
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