Monday, July 23, 2012

European stock markets outside the euro area are outperforming their Eurozone counterparts

Corporations listed in the Eurozone nations are clearly being penalized relative to their Western European counterparts outside the Eurozone. Here are the year-to-date returns by country.

YTD equity returns in local currency

And it's not limited to the Eurozone periphery. Take for example the Nordic markets. Denmark, Norway, and Sweden are up, while Finland is down.

Year-to-date, on a capitalization weighted basis, Western European markets not using the euro have outperformed the Eurozone markets by 5%. Of course if the currency changes are taken into account, this divergence is much higher.
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