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Charting the Markets: Stocks Head for Worst Quarter in Four Years

Stock Market Illustrations As Japan Stocks Slump After U.S. Equities Plunge
Photographer: Tomohiro Ohsumi/Bloomberg

Stock market gains on Wednesday disguise the reality of what happened in third quarter. Asian stocks have dropped for a fifth month, the longest losing run since 2008. The MSCI Asia Pacific Index is also heading for the worst quarter in four years, having dropped 15 percent. China is bottom of the global equity pile after the world's second-biggest economy devalued its currency on Aug. 11. The nation's Shanghai Composite Index is the worst performing primary equity index with a decline of 28 percent, its biggest drop for seven years. European stocks fared marginally better in the past three months, with the Stoxx Europe 600 Index sinking 10 percent, the largest fall since September 2011. Glencore and Volkswagen left their mark on the gauge, with declines of 67 percent and 53 percent, respectively. For positive returns, government bond markets of the U.S., Europe and Asia were the place to invest. The Japanese yen topped the pile in currency performance, followed by the euro and dollar, according to Bloomberg Correlation-Weighted Currency Indices. 

Almost $11 trillion has been wiped off the value of global equities in the third quarter. The reasons for the losses are two-fold: China's economic slowdown and uncertainty over when the Federal Reserve plans to raise interest rates. The ripple effect of those two was felt across all asset classes. In equities, only a handful of global stock markets out of the 93 tracked by Bloomberg have registered gains for the quarter. These are the equity indexes of Latvia, Malta, Slovakia, Estonia and Sri Lanka.