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Europe tops US in stock market
value
Tony Tassell
FT.com
Tuesday April 3, 2007
Europe has eclipsed the US in stock market value for the first
time since the first world war in another sign of the slipping of
the global dominance of American capital markets.
Europe’s 24 stockmarkets, including Russia and emerging Europe,
saw their capitalisation rise to $15,720bn (€11,819bn) at the
end of last week, according to Thomson Financial data. That exceeded
the $15,640bn market value of the US.
The rise of the euro against the dollar, growth of east European
markets such as Russia and stock market outperformance spurred by
improving profitability have seen Europe close a long-held gap with
the US. Ian Harnett at Absolute Strategy Research, who identified
the move, said this marked a “seismic shift” in markets.
The last time Europe eclipsed the US in market capitalisation was
likely to have been before the first world war, said Mike Staunton,
stock-market historian at London Business School. The shift mirrors
a trend in the debt world, where European activity has caught up,
and in some cases overtaken the US.
European shares have outperformed the US, with their market capitalisation
rising 160 per cent since the start of 2003 in dollar terms, said
Thomson Financial. That compared with a 70.5 per cent rise for the
US stock market. Over that time the euro has risen 26 per cent against
the dollar.
Europe trails the US on the indices of market capitalisation compiled
by FTSE and MSCI and which are used by fund managers as benchmarks.
However, these have a reduced or no weighting to shares that cannot
be freely traded such as holdings of governments or controlling
family shareholders. Europe has more companies with such stakes.
INFOWARS:
BECAUSE THERE'S A WAR ON FOR YOUR MIND
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