European periphery beats emerging markets in S&P index

European states most affected by the sovereign debt crisis have shown robust near term gains compared to emerging markets, according to latest constituent performance figures from the S&P Global Broad Market index.

Through the one month of August, Spain, Greece, Italy and Portugal gained between 9% (Portugal) and 13% (Spain). The latter was particularly impressive, after it plummeted 20% in the previous month, July.

The improvement has been fuelled by expectations of support from the ECB and Germany’s promise to continue providing aid to burdened states, S&P said.

Emerging markets, on the other hand, did less well than previous growth forecasts suggested would be the case. Inflows into emerging markets this summer have been low, as investors favoured a more cautious risk off approach.

Over the three months through August, emerging markets overall only managed a 4.07% gain, against the 8.32% gain for developed markets recorded by the index.

The two emerging countries that have fared best on a year to date basis are Egypt and Turkey – up 42% and 36% respectively.

More recently it is the Czech Republic that has shown most gains, up more than 15% over the past three months, although it is still down over 20% on a three year basis, and up barely 1% over the year to date.

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