If ever there was a clarifying vision for what the world's most important fulcrum securities were - and perhaps highest beta - it is the Spanish and Italian equity markets (now that the Spanish and Italian bond markets are almost entirely under implicit control). What is perhaps most interesting about 2012's roller-coaster ride, driven by on-again-off-again angst from Europe, is that Spain and Italy closed the year with the biggest rises off their lows of the year; and in a fascinating twist, close the year with the biggest losses off their highs of the year - of any global stock market. So, depending on your timing as an investor, you either had the best 2012 or the worst 2012. We suspect 2013 will just intensify that beta.
Source: Morgan Stanley