Market Monitor – March 2018

April 27th, 2018, by Richard O'Sullivan

Global equities declined during the month with most indices ending the month in negative territory. The FTSE World index lost over 3.7% in Sterling terms and is down nearly 4.5% year to date. The US Dollar weakened over the month and the S&P500 lost over 4.3% in Sterling terms, but a little over 2.5% in local terms.

The relative strength of Sterling has also created a headwind for the FTSE 100, in part due to the large proportion of revenues that are generated overseas, and the index ended March at 7,056. This is around 9% lower than the recent peak in mid-January in capital terms. When income is added back the index has lost a little over 7% year to date. The FTSE All-Share Technology index in particular had a poor March, shedding nearly 19% of its value, but there was stronger performance in the FTSE All-Share Health Care and FTSE All-Share Pharmaceuticals & Biotechnology indices which were both up over 6% for the month.

The more speculative FTSE Emerging Markets index lost around 4.5% in March. Losses in the FTSE World Europe ex UK index, Asia Pacific ex Japan, and the FTSE Japan index were all around 3% for Sterling investors.

Yields on government bonds fell slightly during the month with the yield on the benchmark 10-year US Treasury now around 2.75%, whilst the 10-year Gilt yield is 1.35%. The FTSE Actuaries UK Conventional Gilts All Stocks index rose 2% in the last month but has gained less than 0.5% in the last 12 months on a total return basis.

Oil prices increased by over 5% in Sterling terms in March and are up over 21% over the last 6 months. However, over the longer term they have dropped nearly 50% in the last five years. Gold prices lost further ground during the month in Sterling terms and are down over 6% in the last year. The weakness of the US Dollar has contributed significantly to commodity price volatility and the gold price is up slightly in Dollar terms year to date.

Read the full Market Monitor here…