China is stock star of 2014! India is number 2.

Lachman Balani

 The last two years it had lost ground but this year thanks to the landmark opening of the Hong Kong- China stock market corridor on November 17, wherebyinternational investors have higher and better access to stocks traded in mainland China, the Shanghai composite index has surged by 52.9%! However, in the small enclave of Hong Kong the Hang Seng lost 1.28%.

Right up to Nov 17 the Bombay Stock Exchange (BSE) of India was the best performing index amongst those closely watched. From Nov 17 till Dec 31 the Shanghai composite gained momentum and made most of its gains- more than 30%! The BSE has gained 30% in the year. It has also crossed the milestone figure of Rs. 1 crore crore (or Rs 100 trillion or USD 1.6 trillion) in market capitalization!

Besides these remarkable watersheds, the year has been marked by many other important episodes, the most important and talked about being the unexpected and egregious slide in oil prices. The West Texas Intermediate has dropped from a high of over USD100 to about USD 53, almost 50%! Gas at the pump went to below USD2 per gallon in the US where only about a year ago it was USD3.Gas in Toronto is below CAD1 per liter. Theories abound as to why this happened, anywhere from a conspiratorial collusion between the US and Saudi Arabia to punish Iran, Russia and Venezuela to a straightforward demand and supply explanation.

Moreover, US 10 year notes that went from 1.6% in May of 2013 to over 3% by the end of 2013, was slated to climb higher to 3.5% but instead has dropped to 2.17%! US 2 year notes have climbed steadily to close the year at 0.67% from a low of about 0.38% at the beginning of the year.

Another very important item is the strengthening of the US dollar which at the beginning of the year was losing ground to the Euro (touching almost $1.40) and pound sterling (touching USD 1.71) reversed course and has ended the year at approximately USD 1.21 to a Euro and USD 1.56 to the pound sterling. It has also gained impressively against the Japanese Yen going from 105 yen to the USD at the beginning of the year to 119 yen on Dec 31.The Canadian dollar went from 0.94 US cents to 0.86 US cents. The mighty buck is back!

Continuing with the most watched stock markets, the US has again shown gains, up from last year with the DOW up 7.52%, NASDAQ up 13.42% and the broad based S&P500 up 11.39%.

In Canada, we experienced a gain of 7.42%.

Europe , that showed impressive gains last year, are a mixed bag as Germany gained 2.65% reaching new highs and France and UK lost 0.54% and 2.71% respectively.

The Johannesburg All Share Index, part of the BRICS (Brazil, Russia, India, China, South Africa) developing markets, climbed 7.60% while Russia and Brazil lost 7.15% and 2.91% respectively.

Another important market South Korea, whose brands like Samsung, LG, Hyundai, Daewoo have become well known internationally, saw its index lose 4.76%.

The prognosis for 2015 is that due to tame inflation, low interest rates and low oil prices, the majority of stock markets will go up.

Below are only 15 of the most watched markets on the globe that set the market trends.

Bourse                                   Close Dec 31, 2014   Close Dec 31, 2013   %change

Shanghai Composite (China)         3234.68                                             2115.98                     52.87

Bombay Stock Exchange (India)  27507.24                                           21140.48                   30.11

Nasdaq (USA)                                  4736.05                                              4176.59                      13.42

Dow Jones (USA)                            17823.07                                           16576.66                   7.52

S&P500 (USA)                                 2058.90                                              1848.36                      11.39

TMX (Canada)                                  14632.44                                           13621.55                   7.42

Nikkei (Japan)                                  17450.77                                           16291.31                   7.12

DAX (Germany)                                9805.55                                              9552.16                      2.65

Johannesburg All Share                49770.60                                           46256.23                   7.60

CAC (France)                                   4272.75                                              4295.95                      (-0.54)

FTSE (UK)                                         6566.09                                              6749.09                      (-2.71)

Bovespa (Brazil)                               50007.41                                           51507.16                   (-2.91)

MICEX (Russia)                               1396.61                                              1504.08                      (-7.15)

Hang Seng (Hong Kong)               23605.04                                           23306.09                   (-1.28)

Kospi (South Korea)                        1915.59                                              2011.34                      (-4.76)