Ireland Bounces Back

Ireland, which had to be bailed out by eurozone partners following the collapse of its property and banking sectors, has seen its stock market soar by 14.8 per cent since the start of 2012. Investors in Irish stocks are celebrating gains that have catapulted them into Germany's league of success this year.

This builds on a gain of 10.8 per cent in 2011, when it was one of only two stock markets in developed Europe to show a positive return, along with the Netherlands. But Ireland currently ranks third in the Russell Developed Europe Index for stock returns, while the Netherlands has plunged to third from the bottom in the league of 18 countries. Denmark has the best-performing stock market this year with returns of 20.7 per cent, followed by Germany with gains of 15.7 per cent, according to the index compiled by Russell Investments.

Greece has managed to stage a turnaround, coming in sixth with returns of 12.4 per cent, after ranking as easily the worst performer in developed Europe with a market plunge of 55.2 per cent in 2011. The UK is in tenth place with a return of 8.6 per cent, as of the market close yesterday. This year's laggards are debt-ridden Portugal and Spain - the former already bailed out and the latter the subject of fearful speculation it will be the next domino to fall in the eurozone crisis. Portugal's stock market has fallen 4.1 per cent so far this year, while Spain's is 12.1 per cent in the red.

'This is quite different to what we saw in 2011, when Spain actually outperformed Germany despite the news headlines favouring Northern Europe. 'Spanish equities haven’t fared well over the first part of this year, far worse than the other countries in the Russell Developed Europe Index,' said Ronnie Sabel of money manager Russell Investments. 'Many European countries have clawed back most of the losses of 2011 so far this year – and even Greek equities have showed a positive year-to-date return of just over 12 per cent. But the huge differences we see amongst the developed European markets shows how volatile and unpredictable they can be.'