KEY POINTS:
Global equity markets suffered their worst month of bloodletting ever in October, losing an estimated US$5.79 trillion ($9.8 trillion), and while New Zealand investors did not escape unharmed they got off relatively lightly.
Standard & Poor's Index Services said world markets had lost about US$16.22 trillion in the first 10 months of the year.
About US$4 trillion was lost in September.
Though US markets accounted for nearly 40 per cent of the losses during the month, they performed better than the average world market. The US accounted for US$2.27 trillion of October's losses, as S&P's broad market index for the nation fell 18 per cent.
The global average decline was 20.7 per cent during the month.
In New Zealand, the NZX-50 index fell by 8.7 per cent. The wider market lost $4 billion in value, taking it to $49 billion which, at just 27 per cent of GDP, marks its lowest point as a proportion of the wider economy in more than five years.
Ironically, the month was the busiest in over three years in terms of trading activity. But it appears that most of this activity was selling. The total value traded for the month on the NZSX was down 26 per cent to $1.86 billion, compared with October last year.
The market's overall value and its headline index the NZX-50 have both declined by 33 per cent since October last year.
Despite the fact that the credit crisis which precipitated global market losses had its origins in the US, S&P senior index analyst Howard Silverblatt said the US had fared comparatively well compared with other countries "because of the depth and types of markets".
Silverblatt said the US also should be able to recover better than others because individual investors were more likely to return to the world's largest market. The US represents about 45.9 per cent of all global equity issues, according to S&P.
In emerging markets and even some developed markets, many investors might not return as the outsized losses had taken their toll, Silverblatt said.
Global markets have declined nearly 40 per cent since the end of May.
Hungary's equity market declined the most in October, falling 43.2 per cent, which equates to about US$8.6 billion in losses. Pakistan performed the best, falling just 4.2 per cent, or US$276 million.
- AGENCIES
