News: Russell Market Review: Russell Market Review - October 2008

Continued high volatility, worries over recession, commodity sell off, Australian dollar weakness.

Fears of a worldwide economic recession and the growing spectre of a U.S. financial services meltdown pushed volatility and uncertainty in equity markets to even higher levels. Fears of slowing global growth had knock‑on effects with commodity prices (the Westpac Commodity Futures Index falling close to 20% over the quarter) and commodity stocks being heavily sold down.

The Australian equity market returned another negative quarter (-10.7%) to deliver the first run of four successive negative quarters since the 1990-91 recession. Volatility remained high with a 4% decline occurring on the last day of the quarter.

International equity markets also suffered with the MSCI World index down 11.3% in local currency terms. However, the extraordinary depreciation of the Australian dollar over the period resulted in unhedged returns for the same index being much greater at +3.1%.

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