Chart of the Day: FTSE ST Small Cap Index recovers with a 4.9% total returns in January

Along with other regional small cap stocks, it was hit by the rising USD as well as trade tensions.

This chart from the Singapore Exchange (SGX) shows that the FTSE ST Small Cap Index saw 4.9% total returns in January YTD, recovering one-third of its 15% decline back in 2018. This also follows STI’s 5% gain over the first three weeks in January.

“Regional small cap indices were amongst the stock market’s least performing segments in 2018 on the rising US Dollar, trade tensions & decelerating growth outlooks,” SGX explained.

The chart also shows China’s FTSE China A Small Cap Index dropped 38.3%, which was significantly more than the decline posted by the 50 constituent FTSE China A50 Index. SGX noted that 2018 saw regional small Cap Indices declined more than the benchmarks.

“For instance, the FTSE Asia Pacific Small Cap Index declined 16% last year compared to the FTSE Asia Pacific Index which declined 12.3%,” SGX explained.

According to SGX, regional stock markets were hit by the decelerating gross domestic product (GDP) growth outlooks in 2018 across the region. They were also affected by the pace of US interest rates hikes and corresponding 4.4% gain in the US Dollar Index.