• Global equity markets rebounded strongly in October, driven by the actions of central banks across the world
• Further delays in the increase of US interest rates caused the S&P 500 to grow by 6.4% and the prospect of more quantitative easing in the Eurozone led to a 5.0% increase in the FTSE Europe Index, despite a weaker Euro
• In the UK, as resource stocks partially recovered from recent losses, the FTSE All Share Index showed a gain of 4.7%
Peter Dean, investment consulting director, says:
“Global equity markets rebounded strongly in the past month, and world equity markets were clearly dominated by the actions and statements made by various central banks around the world.
“A further delay in the rise in US interest rates prompted a 6.4% increase in the S&P 500, whilst in the Eurozone, markets were buoyed by the prospect of both further European quantitative easing beyond the current €60bn a month and lower deposit rates. This led to a 5.0% increase in the FTSE Europe Index despite a weaker Euro.
“The FTSE Indices in Japan and China rose by 7.9% and 7.2% respectively. Japan’s increase was prompted by the Bank of Japan’s announcement of an extension of its own massive quantitative easing programme, and the rise in China was driven by the sixth cut in the Bank of China’s benchmark interest rate of 0.25% and a reduction in the commercial bank reserve ratio.
“In the UK the FTSE All Share Index showed a gain of 4.7%, as resource stocks partially recovered from recent losses; Q3 GDP growth slowed to 0.5% from 0.7% in Q2, which is a figure below market expectations and could be pointing to a cooling of growth that reinforces the BoE’s lack of urgency to hike interest rates; and inflation remains very low and wage pressures remain subdued, which may cast doubt upon the BoE’s ability to reach its 2% inflation target over the medium term.”
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