Global equity markets were positive in April as they bounced back from the downturn in March caused by the outbreak of conflict in the Middle East.

Although the situation remains unresolved, with the Strait of Hormuz still heavily disrupted and the price of oil continuing to exceed $100 a barrel, global developed equities measured by the MSCI World index still managed to climb nearly 9%.

It was a particularly strong month for the US equity market with AI stocks seeing a resurgence after several months of underperformance. Emerging markets also recovered strongly after being among the hardest hit during the initial outbreak. Korean stocks for example surged over 30% upwards in April after slumping 19% in March. UK stocks on the other hand lagged behind as the FTSE 100 index picked up just over 2%.

While equities recovered well, fixed income assets continued to struggle. In the UK, the gilt index slipped another -0.5% as yields continued to climb. The UK inflation rate, according to the Consumer Prices Index, rose to 3.3% in March, and with the elevated oil price expected to result in more inflation, forecasts suggest that the Bank of England is likely to hike the base interest rate a couple of times by the end of the year.

Full round-up of April market performance

In the UK, the FTSE 100 index gained 2.28% while medium and smaller companies, measured by the FTSE 250 ex IT index and the FTSE Small Cap ex IT index respectively, rose 6.46% and 5.63%. In the US, the S&P 500 USD index surged 10.49% while in Europe the Eurostoxx 50 EUR index gathered 6.37%. Japanese stocks measured by the Topix JPY index picked up 6.57%.

Emerging market returns also bounced back with the MSCI Emerging Markets index rallying 13.28% in local currency terms. Chinese equities measured by the MSCI China CNY index grew 3.39% while Indian stocks measured by the Nifty 50 INR index amassed 7.46%. However Latin American equities lagged as the MSCI Latin America local currency index slipped -0.37%.

In the fixed income market, UK government bonds, measured by the FTSE Gilts All Stocks index, fell 0.47% with long dated (over 15 years to maturity) gilts declining 1.83%. Sterling denominated corporate bonds, measured by the Markit iBoxx Sterling Corporates index, returned 0.32%. In the high yield market, the ICE Bank of America Sterling High Yield index increased 1.83%.

In the commodities market, the S&P GSCI USD index, which consists of a basket of commodities including oil, metals and agricultural items, gathered 6.42%. Brent crude oil futures rose 3.64% during the month. In the precious metals markets, the S&P GSCI Gold and Silver indices dropped -0.75% and -1.62% in USD respectively, while in the agricultural markets corn and wheat futures returned 1.53% and 1.22% in USD respectively.

In currency markets, it was a strong month for the pound as it appreciated 2.85% versus the US dollar, 1.28% against the euro and 1.49% versus the Japanese yen.