Here are the stock market winners and losers in March and a look at prospects for April.
Global stock markets have had an interesting month as they marked the one-year anniversary of the first Covid lockdown. Returns were mostly positive, however, despite a stranded container ship causing a massive traffic jam at either end of the Suez Canal, one of the world's busiest trade routes.
Blocking the Suez, which connects the Mediterranean and the Red Sea, for the best part of a week, caused huge tailbacks, disrupting as much as $9 billion of global trade each day.
But professional investors have been more interested in speculating on the return of inflation and the impact of higher interest rates on economic growth. As vaccine rollouts continue worldwide, the potential for lockdowns to ease increases, unleashing the animal spirits pent up over the past year.
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- UK interest rates, inflation and savings in 2021
European stocks had a good month. The best performing major global stock market was the German DAX, which rose 8.9% in March*. The French CAC 40, which lagged most other indices in 2020, improved by 6.7%, while the Swiss index added 5.6%.
Elsewhere, the Dow Jones and Brazil made the top five risers with gains of 6.9% and 6.2% respectively.
Our own FTSE 100 advanced 4.4%, but it’s been painfully slow progress for the blue-chip index. Since vaccine optimism triggered a recovery in November, the Footsie is up a modest 6.1%, placing it among the worst performing of the world’s major indices. AIM, by comparison, is up 20%, although, after leading the world during the pandemic, it paused for breath, gaining less than 1% in March.
America’s tech-heavy Nasdaq Composite, a star index last year with a return of 43.6%, fell 1.1% in March, hurt by losses at Tesla (NASDAQ:TSLA), Netflix (NASDAQ:NFLX) and a 20% slump at Covid drug firm Moderna (NASDAQ:MRNA). Chinese indices also suffered losses, propping up the performance table.
Look ahead to April
April is historically the strongest month of the year for stocks. According to the Stock Market Almanac, the FTSE All-Share index has fallen just nine times in the past 50 years. It has risen in each of the past three years and fallen just three times in the past 15 years. Losses for the years when it did fall were modest.
The average return for the index between 1970 and 2017 – the last year the Almanac recorded the data - was 2.6%. In 2018, the All-Share rose 6%, then 2.2% in 2019 and 5% last year.
“This is quite remarkable, and not surprisingly makes April the strongest month of the year for equities,” the Almanac wrote.
*share prices as at early afternoon 31 March 2021
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