Following the IMF downgrade for global growth, equity markets were relatively unmoved as growth expectations had already been marked down. Most economists had previously downgraded their forecasts in response to weaker growth in both the US and Japan, combined with ongoing concerns over the emerging markets, uncertainty over the EU Referendum and commodity prices. As commodity prices firmed up and business surveys picked up, the outlook brightened somewhat. With growth and inflation continuing to disappoint, central banks are under increasing pressure to add further stimulus.
In the UK, the FTSE100 gained 235.4 points or 3.8% to the month’s high of 6410.30 (20 April), losing ground in the latter days of the month to finish April at 6241.90, a modest month-on-month rise of 1.1%. The wider FTSE250 lost 0.7% over April, to close the month at 16,801.60. The junior AIM gained 2.4% over the month to close on 727.70.
Across the pond, the Dow Jones index gained a mediocre 0.5% during April to close the month on 17,773.64. The NASDAQ, heavily influenced by technology stocks, fared worse losing 94.49 points to 4775.36 a fall of 1.9%. On 28 April, Fed officials voted to leave monetary policy on hold, opting not to guide towards an imminent hike in interest rates. Their statement reflected a slight improvement in the economic outlook as they removed the reference to global developments continuing to pose risks.
On the continent, the Eurostoxx50 experienced a three month high of 3151.69 (21 April), however ended the month gaining just 23.28 points to 3028.21, an advance of 0.8%. In Japan, where government debt continues to rise and the budget deficit remains high, the Nikkei225 index lost 0.6% to 16,666.05. In a surprise move, on 27 April the Bank of Japan chose not to increase stimulus efforts against market expectations.
In currency markets, the US dollar finished the month at $1.45 against sterling and the euro closed at €1.27 versus sterling. Oil had a good month, Brent crude ended April up 17.5% to $47.39 a barrel. Gold also experienced positivity with the metal rising +4.9%, to close at $1,292.87 a troy ounce.
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