Share investors have entered February with a nasty loss in January to contend with.
In Australia the loss will halt the recovery in super funds that occurred in the second half of 2009.
Balanced funds ended the year up 12.9% and 2.2% in December.
After the local market fell more than 6% last month, another flood of red ink is on the cards.
The weakness here is much greater than in the US and Asia because we are linked tightly to Asia and Asia is taking the brunt of the emerging correction to the long rebound that started last March.
Most Asian sharemarkets hit 15 months highs midway through January, now they are all selling off, from China to Australia.
Japan was the one major exception because of its befuddled government, and its central bank can’t deal with the tightening deflationary spiral.
The FTSE Asia-Pacific Index fell 1.6% on Friday, registering a 4.2% fall last week.
The MSCI Asia Pacific Index fell 4.5% last week, its biggest fall since last March when the rebound was starting.
That saw the MSCI emerging markets fall 5% last month as investors trimmed their holdings and took profits.
The Dow Jones Global Index ex the US fell 4.6%.
For the month the markets in the region had major falls in many cases, as they reacted to more weakness on Wall Street and worries about the prospects for global growth, especially in China.
The Shanghai Composite fell 8.8% last month, after gaining 80% last year.
Hong Kong’s Hang Seng Index ended the month with an 8% decline, Taiwan’s Taiex was down 6.7%, Australia’s ASX 200 fell 6.2%, South Korea’s Kospi was 4.8% lower and Japan’s Nikkei fell 3.3%.
The monthly fall was around 8%, well above the 2.7% fall in Europe and about 3.5-4% for Wall Street.
US shares dropped on Friday as worries about fiscal turmoil in Europe and a drop in technology stocks pushed the S&P 500 to the worst monthly fall since February of last year.
The Dow dropped 53.13 points to 10,067.33, the S&P 500 lost 10.66 points to 1,073.87 and the Nasdaq fell 31.65 points (1.45%) to 2,147.35.
The recent sell-off has seen the S&P 500 tumble 6.7% in the eight trading sessions to last Friday.
For the week, the Dow lost 1.1%, the S&P 500 fell 1.7% and the Nasdaq lost 2.6%.
For January, the Dow was down 3.5%, the S&P 500 shed 3.7% and the Nasdaq slumped 5.4%, despite solid results from the likes of Apple, Google and Microsoft.
Australian shares slumped more than 2% on Friday and are facing another sell down today of 1% or more.
January’s 6.2% loss was the worst monthly performance since October 2008 (when it was staggering after the Lehman Brothers implosion) and with the small fall in December, the market is now off almost 7%.
At the close Friday the ASX200 index was down 103.7 points, or 2.2%, to 4569.6, its biggest one-day percentage slide since late November and back to the level of early last November.
The All Ordinaries index fell 100.8 points, or 2.1%, to 4596.9.
Last week’s loss also made it three weeks in a row of declines.
