Investor An insider's guide to the market: Stock markets during November were somewhat lacklustre, particularly in comparison with the returns from some previous months.

Nevertheless, most equity indices finished the month with small positive gains so that the year-to-date performance for most markets still retains a healthy glow (see table).

Movements in stock markets in November were somewhat overshadowed by activity in the foreign exchange markets, where the dollar renewed its recent declining trend.

At end October, the dollar/ euro rate was $1.16 but, by end-November, it had fallen to a rate of $1.20, equivalent to further dollar depreciation of 3.4 per cent. For euro-zone investors this, of course, means the November returns from the Standard & Poor's 500 and Nasdaq were negative when translated into euro.

Adjusting the year-to-date returns for exchange rate movements also changes the relative rankings of equity market performances. Since end-December 2002 the dollar/euro rate has declined by 14 per cent, so that the return from the Standard & Poor's 500 becomes only 6 per cent when converted into euro.

Likewise the depreciation of the dollar takes some of the gloss off the Nasdaq performance bringing the 46.8 per cent dollar return down to a euro return of just under 30 per cent.

The Irish equity market under-performed other European markets in November, but year-to-date the ISEQ Overall Index has produced a very strong return of 18 per cent.

This compares very favourably with the return of 8.7 per cent from the FTSE Eurotop300 index and the return of 10.2 per cent from the British market.

It is also well ahead of the US markets as measured by the Standard & Poor's 500 when dollar returns are translated into euros. Therefore, for Irish-based investors, the domestic equity market has come up trumps in 2003.

Among the top-performing Irish-listed stocks in 2003 are Horizon Technology, Kingspan and Elan, with share price gains well in excess of 100 per cent in all three stocks. Interestingly these three shares come from three different industrial sectors.

Horizon is a relatively long-established technology company that rode the stock market technology boom-and-bust. The share price traded as low as 27 cents during 2003 but is now trading at more than 90 cents.

Kingspan produces steel and chemical-based building materials in Ireland, Britain, Europe and the US. The share price was weak in 2001 and 2002 as the company encountered problems with its US acquisitions in particular.

An arbitration ruling with regard to its Tate acquisition in the US came down in favour of Kingspan and this underpinned an already recovering share price. With most of Kingspan's markets improving during 2003 the share price has recovered sharply and is now up 145 per cent so far this year.

Troubled Elan Corporation has managed to find a base to its share price, which has risen by 120 per cent during 2003. At the current price of €4.50, the share price is still only at a fraction of its all-time highs. Nonetheless, with the recent successful fund-raising through the sale of equity and bond securities, the company has probably secured its future as an independent entity.

Among the mainline stocks, Anglo Irish Bank stands out with growth of 67 per cent in its share price in 2003.

This performance is particularly noteworthy in that it comes on top of several consecutive years of very strong returns, and has been achieved in a year when other financial stocks have been lacklustre.

AIB's shares are languishing at 4 per cent below their level at the start of the year and Bank of Ireland is only modestly better with a year-to-date return of 6 per cent. With the big banks under-performing, CRH has been the best large capitalisation stock during 2003, with a rise of 32 per cent to the end of November.

Given that CRH earns a large proportion of its profits from the US market, this is a creditable performance, since profit growth has been impeded by dollar weakness.

In contrast, the worst performing stock is Waterford Wedgwood, which at the end of last month was down 43 per cent so far this year.

The shares hit a low of 20 cents during the year and are now trading at 24 cents.

The weakening US dollar is very bad news for Waterford Wedgwood, since the bulk of its sales are into dollar markets.

Even if there is a strong recovery in demand for its products in 2004, Waterford Wedgwood will struggle to maintain adequate profit margins if dollar weakness persists.

After such a robust recovery in recent months investors will be wondering whether further rises are in the pipeline.

From a short-term perspective the historical record is that December is usually a good month for share prices, so some further gains before the year-end may still be in prospect.

Beyond year-end, the ability of share prices to advance further will, as usual, depend on broader economic and political developments.