Halloween on the financial markets. What have been the tricks or treats of 2023?

Halloween on the financial markets. What have been the tricks or treats of 2023? Analysis reveals biggest market spook stories along with those offering investors sweetest deal.

• Japan’s often overlooked market up 22% while Italian stocks (+19%) have also treated investors
• Romania’s market posted an impressive growth with the BET index up 21% in 2023
• Property-heavy Hong Kong index has been a scary ride for investors, slumping 20%
• Semiconductors (+30%) and social media (+22%) lead sectors, with utilities (-21%) lagging behind.

Just like a Halloween night, the stock market can be spooky, with unexpected twists and turns. With days to go until we mark the occasion, new analysis by eToro reveals the biggest stock market tricks and treats of 2023.

The trading and investing platform looked at the performance of the largest stock markets around the world, along with sectors, ranking the best and worst of 2023 across both.

Japan and Italy treat investors

Those retail investors who backed Japan this year have had the sweetest deal, with its biggest stocks up more than 20%, while Italy’s stock market, which has one of the world’s lowest price/earnings ratios, has rallied 19% (Table 1). In stark contrast, Hong Kong’s property-heavy market has slumped 20%, while Chinese stocks fell 10%, as China’s economy has struggled with reopening from its long Covid lockdown.

Collectively, all global equities have risen by 9% this year, providing relief to investors after the chilling performance of last year.

The Romanian stock market definitely deserved a treat this year. Indeed, from the beginning of the year, the BET index has gained 21%, doing better than the US markets (14%), as well as the global average (9%).

Table 1: Best and worst performing of the 25 largest global stock markets YTD (%)

Ben Laidler, Global Markets Strategist at eToro, explained: “Even as US stocks have powered ahead, it has been Asian markets that have seen both the tricks and treats of 2023. Japan’s stock market is often ignored but the world’s second largest market has been benefiting from its newly competitive currency. Meanwhile, China’s economic reopening has disappointed high investor expectations and seen the market slump.”

Utilities and telecoms will have spooked investors this year

eToro’s analysis also included a breakdown of US sectors (1) (Table 2), with semiconductors massively rewarding investors, recording a 71% growth this year, followed by the media and entertainment industry, up 52%. As for the scariest sector performances, utilities and telecoms fell 21% and 16% respectively.

Table 2: Best and worst performing US sectors and industries YTD (%)

“The significant rise of both semiconductors and social media reflect the optimism over the record-breaking adoption of artificial intelligence technology. However, renewable energy’s growing pains and higher interest rates have driven this year’s utilities share price plunge, with hope the most frightening of these headwinds is nearing an end.”, adds Laidler.

Looking at stocks individually, big tech NVIDIA surged over 200%, taking its market capitalisation into the otherworldly club of over $1 trillion, yet its performance was left in the dust by the near 900% rally of Turkish electrical grid stock Astor Enerji and the 700% rebound of US online car retailer Carvana. At the other end of the spectrum, India’s Adani Group, China’s real estate stocks, US car parts retailer Advance Auto, discount store Dollar General and cable provider DISH were all down by 60%, with renewable stock giants such as SolarEdge and Enphase not far behind.

No Elon Musk did not host a Halloween Party in Dracula’s Castle—interior ministry officials