Standard & Poor’s announced that the world’s emerging and developed equity markets were hit hard during the first quarter of 2008, losing 10.56% and 8.95%, respectively, during the first three months of the year.

For the first quarter, among the 26 developed markets, only Luxembourg managed a positive return (+2.1%). The hardest hit developed equity markets over the period were Iceland (-32.4%), Hong Kong (-18.1%) and Greece (-14.9%). Canada was down 7.1% in the quarter.

“Near record commodity prices, 10-year U.S. Treasury rates approaching their lowest level, a struggling dollar, and the potential global impact of a perceived U.S. recession all fueled market volatility and uncertainty during the first quarter,” explained Howard Silverblatt, senior index analyst at Standard & Poor’s.

As for emerging world equity markets, 15 of the 26 countries lost ground during the quarter, S&P reported. The best performing markets during the first quarter were Morocco (+23.8%), Pakistan (+10.25%), and Chile (+8.5%). The worst performers during the first three months were Turkey (-36.6%), India (-28.55%) and China (-24.65%).

For the month of March, world equity markets lost 1.1% and emerging equity markets fell 5.1%, S&P said. Additionally, it noted that eight of the 10 sectors posted losses with only Industrials (0.19%) and Consumer Staples (2.65%) posting gains. And, growth (-1.3%) underperformed value (-0.87%) in March.