July was a mixed month for equity markets as anticipation built over central banks cutting interest rates.

In the US, while the S&P 500 index gained over 1%, investors began to fall out of favour with large tech stocks as the NASDAQ index suffered its biggest one day drop for nearly two years on 24th July, before ending the month down 1.6%.

In the UK general election, the Labour party led by Sir Keir Starmer secured a landslide victory, winning 411 seats in the House of Commons. With the outcome widely forecast beforehand, market reaction on the day was minimal, but it was a good month for UK markets in general with the FTSE 100 gaining over 2.5% and medium companies measured by the FTSE 250 surging nearly 8%.

Full round-up of July market performance 

In the UK, the FTSE 100 index gained 2.53% while medium and smaller companies, measured by the FTSE 250 ex IT index and the FTSE Small Cap ex IT index respectively, picked up 7.97% and 5.61%. In the US, the S&P 500 USD index rose 1.22% while in Europe the Eurostoxx 50 EUR index fell 0.29%. Japanese stocks measured by the Topix JPY index declined 0.54%.

Emerging markets returns were mixed, with the MSCI Emerging Markets index rising 0.67% in local currency terms. Latin American equities, measured by the MSCI Latin America local currency index, amassed 2.65% while Indian stocks measured by the Nifty 50 INR index gained 3.92%. However Chinese stocks measured by the MSCI China CNY index slipped 1.44%.

In the fixed income market, UK government bonds, measured by the FTSE Gilts All Stocks index, returned 1.75% with long-dated (over 15 years to maturity) gilts climbing 2.55%. Sterling denominated corporate bonds, measured by the Markit iBoxx Sterling Corporates index, rose 1.64%. In the high yield market, the ICE Bank of America Sterling High Yield index delivered 1.42%.

In the commodities market, the S&P GSCI USD index, which consists of a basket of commodities including oil, metals and agricultural items, lost 3.52%. Brent crude oil futures sank 4.45% during the month. In the precious metals markets, the S&P GSCI Gold and Silver indices returned 4.13% and -1.63% in USD respectively, while in the agricultural markets corn and wheat futures conceded 3.65% and 4.74% in USD respectively.

In the currency markets, it was a mixed month for the pound as it appreciated 1.67% versus the US dollar and 0.63% against the euro but shed 5.20% versus the Japanese yen.