A Comparatively Modest Market Recovery in UK in 2013

The FTSE All-Share Index rose by 17% in 2013 (+14% for FTSE 100) boosted by near 30% growth in the Mid and Small Cap Indices. This is welcome news and gives hope of further market recovery for the UK during 2014.

However, despite nationalistic sentiment in the UK talking down European performance, European equity market recovery for 2013 was stronger than in the UK. The FTSE World Europe Index (which excludes the UK) showed European market values growing 21% in sterling value - 4% better than the UK. This was mainly driven by strong German performance but was also helped by significant improvement in Spain.

US market improvement remained ahead of both UK and Europe with the Dow Jones up 24% and the S&P500 even stronger at +27% (both in sterling value).

After decades of stagnation Japan turned in the top sterling value market gain with 26%, though looking forward special factors there need to be taken into account.

Elsewhere market value growth was markedly lower. China is now slowing down as it moves away from its massive reliance on export led growth, and all major markets in South East Asia - apart from Malaysia - registered losses.

This should give pause for thought to all those people who fondly believe that turning our backs on Europe and embracing emerging markets in Asia elsewhere would be a cost-free (let alone positive) option for the UK. An economically more rational proposition for the anti-Europe brigade, and I suspect this might be the hidden agenda for UKIP and part of the Tory party, could be ever closer ties with the USA - and some at least of these malcontents with stars and stripes in their eyes would probably even welcome the prospect of UK51!