Global stock markets regained much of their credit squeeze losses during the second half of August 2007 to end the month only in slightly negative territory. The MSCI World Index was down -0.3% and the MSCI Emerging Markets Index lost -2.2%, but ten of the 54 indices in the accompanying table still managed to end the month higher in US dollar.

Although the month as a whole did not pan out too badly, the period was characterized by a roller-coaster ride and calm only started to return to markets after Bernanke came to the rescue with a US discount rate cut on August 17, as shown by the graph of the Dow Jones World stock Index.

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Source: StockCharts.com

The best three-month performances came from East-Asian countries, with the Shanghai Composite Index up +28,7%, followed by the Hang Seng Index with +16,4% and the Thailand Index with +11,2%. China, Russia and Brazil all delivered positive returns, but India slipped further from 11th position to 29th with a decline of -3,1% for the three months.

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Source: StockCharts.com

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Source: StockCharts.com

The Nasdaq 100 Index with a gain of +3.2% was the best performer of the US stock markets, followed by the Dow Jones Industrial Index with a loss of -2.0% and the S&P 500 Index with -3.7%.

Pan-European stock markets in general fared worse than the US markets, with the German DAX Index down -2.3%, the FTSE 100 Index down -3.8% and the Paris CAC Index down -6.0%.

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Bright diamonds: The following stock market rankings have improved considerably compared to the six-month rankings:

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Source: Plexus Asset Management (based on data from I-Net Bridge)

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Source: StockCharts.com

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Lame dogs: The stock market rankings that have slid down most on the ranking table were represented by the following mixed bag of indices:

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Source: Plexus Asset Management (based on data from I-Net Bridge)

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Source: StockCharts.com

Although the current bounce may have more legs, I am not convinced that we are out of the woods yet. Caution remains if getting adequate sleep is a consideration.

Click on the following link for the detailed performance figures:

Global stock market price movements

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