Market volatility eased off in April as fears surrounding the stability of the banking sector began to dissipate. The MSCI World index, which tracks the global developed equity market, increased 1.6% during the month. The VIX index, which measures implied volatility in the US equity market, declined to its lowest level since 2021 towards the end of the month before creeping back upwards over the last few days due to the downfall of another US bank, First Republic.
In the UK, inflation declined 0.3% during March but remained in double figures at 10.1% according to the Consumer Prices Index. Gilt yields trended back upwards during the month, with the 10 year yield climbing from 3.49% to 3.72%. Pound sterling enjoyed another month of strengthening against the US dollar as it surpassed $1.25 for the first time since last June.
Full round-up of April’s market performance
In the UK, the FTSE 100 index gained 3.41% while medium and smaller companies, measured by the FTSE 250 ex IT index and the FTSE Small Cap ex IT index respectively, climbed 3.85% and 3.70%. In the US, the S&P 500 USD index rose 1.56% while in Europe the Eurostoxx 50 EUR index gathered 1.78%. Japanese stocks measured by the Topix JPY index were up 2.70%.
Emerging markets returns were more mixed, with the MSCI Emerging Markets index slipping 0.68% in local currency terms. Chinese stocks were the main reason for the decline, with the MSCI China CNY index dropping 5.03%. Meanwhile Indian stocks measured by the Nifty 50 INR index rose 4.06% and Latin American equities, measured by the MSCI Latin America local currency index, put on 1.98%.
In the fixed income market, UK government bonds, measured by the FTSE Gilts All Stocks index, declined 1.66%, with long dated (over 15 years to maturity) gilts sliding 3.45%. Sterling denominated corporate bonds, measured by the Markit iBoxx Sterling Corporates index, gathered 0.32%. In the high yield market, the Bank of America Merrill Lynch Sterling High Yield index returned 0.38%.
There were mixed returns in the commodities market. The S&P GSCI USD index, which consists of a basket of commodities including oil, metals and agricultural items, dipped 0.76%. Crude oil futures advanced 1.47% during the month. In the agricultural markets, corn and wheat futures slumped 3.71% and 10.47% in USD respectively. In the precious metals markets, the S&P GSCI Gold and Silver indices gained 1.04% and 3.94% in USD respectively.
In the currency markets, it was a positive month for the pound as it appreciated 1.86% versus the US dollar, 0.26% against the euro and 4.45% versus the yen.