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Exploring World Stock Markets

The world is a big place, no much more so that in the world of finance. The stock exchanges around the world manage the flow of investment into companies, the funding of expansion, the funding of retirements and in the 60 major stock exchanges around the world, there is a value of $69trillion being held or traded.[1]

Stock market graph-1

Of these, there are 16 exchanges that are in a unique position of being in the ‘$1Trillion Club’ or exchanges that have a total market capitalisation of over $1trillion’. The New York Stock Exchange, the Nasdaq and the Shanghai Stock Exchange are all part of this club, but so toois the ASX or Australian Stock Exchange, showing that although Australia maybe small, its markets in the terms of the world stock markets are relatively positive.

87% of global market capitalisation stems from the $1trillion club, but over 93% of global stock value is split between only three continents, America (40.6%), Europe (19.5%) and Asia (33.3%).[2]

The big mover in financial circles in the past decadeis Asia, in particular, China & Taiwan. While it is projected these markets will cool, what is exceptional in terms of GDP growth predictions is that the large majority of projected growth in the next decade to 2029 is expected in African and East Asian nations such as Ethiopia, India and Bangladesh. These countries have for a long time suffered in terms of economic growth and prosperity for their people[3].

Although the world stock markets, particularly the major 60 markets around the globe operate independently from one another, they are most certainly linked. For example, when the New York Stock Exchange has a negative result, as does most of the other stock markets around the globe, as they are intrinsically linked to the New York Stock Exchanges performance.

The Australian Securities Exchange (ASX) is dependent on China with the major Chinese Exchanges of the Shanghai Stock Exchange (SSE) and the Shenzhen Stock Exchange (SZSE) a big focus. Australia is dependent on the growth in demand of the goods and services produced by Australian companies on the ASX by the companies within the Chinese market place.

World stock markets are also responsible for the prosperity of many of the populations of the countries they exist within. In Australia every working individual has a superannuation account,superannuation performance is largely leveraged off the performance of the world stock markets, or in some cases, the shares on the ASX. This means if the world stock markets crash, so does the personal wealth of the individuals not only with trading accounts but also with superannuation accounts.

This was seen back in 2008, with the global financial crisis caused by the major players on the world stock markets not being prepared for a crisis or a downturn of such magnitude, plunging many countries’ economies into recession and putting individuals, companies and governments back decades in some cases in terms of economic development and personal financial goals.

As individuals we may not be able to impact world stock markets, however, it is important as an investor to be mindful of their movements.If a global recession or crash occurs again, the consequences could be personally devastating.




We welcome you to give our team a call to discuss your investment goals and objectives.

You can call Walker Capital Australia on +61 2 8076 2210, and we’ll see how we can help you achieve your investment goals.

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