With Greece apparently saved and with Central Banks around the world continuing to add nitrous to the global economy, the phrase that applies to most equity markets is "off to the races". Even those stock markets ranked towards the bottom in terms of 2012 performance, such as in Greece and Cyprus, shot up initially, gave back some of the rally, and then flattened out. Very few equity markets have made or come close to new 52 week lows since the beginning of January, but one of the exceptions is in the Slovak Republic. The benchmark Slovak equity index, the Slovak Share Index, has been on a steady decline since last May and after a sizable 6.3% drop in Monday's session, hit a new 52 week low of 198.66.
On a relative basis, the decline in Slovak stocks since May isn't that all that notable: it was the 30th worst performing benchmark equity index out of the 91 that we track. With that being said, the decline has been steady and has continued through the 2012 rally.
The only specific news we could find related to today's drop
was an announcement by Peugeot that they were reducing estimated 2012 automobile production by 20% (from 300K down to 240K). Although that number is still well above 2011 production of 185K.
Using the IMF's GDP estimates, we have a chart comparing GDP growth with equity index performance and there is quite the divergence. The chart is normalized in 2007 so it's possible that Slovak equities were significantly overvalued in 2007. However one can definitively say there's been a huge disconnect between the GDP numbers and the stock market starting in 2009.
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