The value of ASX-listed stocks, as measured by the All Ordinaries Index, fell 2.9% during August 2011. All other major markets fell more sharply during the month including Singapore down 9.5%, Japan down 8.9%, Hong Kong down 8.5%, the UK down 7.2%, and the US down 5.7%.
Rapid declines in global markets were combined with a sharp spike in volatility, back to levels last seen around the time of the May 2010 ‘flash crash’ in the US. The market movements were driven by concerns about the outlook for the world economy, the fiscal and debt positions of major governments, and the downgrade of US Government debt by Standard and Poors.
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