Market Review March

UK

The FTSE All-Share Index lost 15.1% in sterling terms during March, with global stocks plunging as Covid-19 became a pandemic. As domestic Covid-19 cases increased, the UK government imposed a nationwide lockdown, mirroring the containment measures of various EU countries, entailing the closure of schools and nonessential retail businesses as part of strict social distancing rules to be reviewed every 28 days. Various economists forecast the UK would soon enter a Covid-19 induced recession. The Bank of England announced two emergency interest rate cuts during the month, slashing official rates from 0.75% to 0.1%, as well as flagging £200bn in fresh quantitative easing. The UK government also pledged around £60bn in additional public spending to finance initiatives targeting individuals and businesses suffering from the economic fallout of Covid-19. In terms of sectors, aerospace & defense (-36.3%), real estate investment trusts (-34.7%) and banks (-29.5%) were the worst hit this month, while pharmaceuticals & biotechnology (+2.7%), tobacco (+2.3%) and food producers (+1.5%) performed relatively well.

FTSE All-Share Total Return (TR) GBP (%)*

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Past performance is not a guide to future performance. The value of all stock market investments can go down as well as up and you may not get back the full amount originally invested. 

Europe

The FTSE World Europe ex-UK Index returned -11.4% in sterling terms. European stocks plunged on coronavirus fears and the associated severe decline in economic activity. Italy and Spain stood out as the worst-affected European nations in terms of coronavirus deaths and case numbers. Meanwhile, various EU countries intensified social distancing measures to contain the outbreak. To counter the economic drag from Covid-19, the European Central Bank unveiled a new $750bn bond-buying programme. It also ordered eurozone banks to halt dividend payments and share buybacks in the hope of freeing up more cash for lending to households and businesses. The German government pledged an additional €122.5bn in spending to counter the economic slump caused by coronavirus. Survey data for March suggested eurozone business activity had fallen to its lowest level in recent history.

FTSE World Europe ex UK TR GBP (%)*

US

The FTSE All-World North America Index fell 10.4% in sterling terms over March. US stocks sold off sharply as Covid-19 became a pandemic, with the total number of US confirmed cases surpassing those of China. The US federal government issued social distancing guidelines, while certain US states imposed further containment measures. The Federal Reserve slashed official US interest rates from 1.75% to 0.25% and announced unlimited quantitative easing. The US Congress approved a $2tn fiscal stimulus programme. In the week ending 21 March, a record 3.3 million filed US unemployment claims, versus 281,000 in the prior week, as Covid-19 weighed. Survey data for March suggested US business activity had declined at its sharpest clip since the financial crisis. President Trump invoked legal powers to force autos maker General Motors to manufacture ventilators amid a shortage of medical equipment.

FTSE All-World North America TR GBP (%)*

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*Source: Lipper to 31 March 2020, total return. Indices rebased to zero at 28 February 2020.

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