Global markets constantly fluctuate month-to-month due to various interconnected factors influencing supply and demand, investor sentiment, economic conditions, and ongoing geopolitical events such as the ongoing Israel-Hamas conflict.
Our monthly market update provides a clear and easy-to-understand overview of the global market landscape, highlighting a few significant changes in key global stock markets that might affect your portfolio.
Global Market update Overview: October 2023
Global markets have exhibited a mixed picture in October 2023. As the Israel-Hamas conflict further intensifies, risks of stagnating growth, stubbornly high inflation and the broader fragmentation of global markets remain. The graph below shows that although there were a few solid days for global markets, October finished with all world indices showing a negative performance. The world index finished at -2.97%.
USA Market update – October 2023 Overview
Last week, the Wall Street Journal revealed that US GDP grew 4.9% during the third quarter, the fastest rate since the end of 2021, driven by solid consumer spending. Stocks rose Tuesday, 31st October, regaining some ground at the end of a subpar month defined by surging interest rates in the US.
Real estate and financials outperformed within the S&P 500 last month, with the sectors higher by 2% and 1.1%, respectively. However, some tech stocks lagged, such as Alphabet and Meta.
How did October finish for US markets?
- The S&P 500 is up 0.65% to 4,193.80 at the end of October
- NASDAQ is up 0.48% to 12,851.24 at the end of October
- Dow Jones is up 0.38% to 33,052.87 at the end of October
Asia Market update – October 2023 Overview
During October, markets in Asia-Pacific territories rebounded and had overwritten earlier losses as investors assessed private surveys of business activity from Japan and Australia, as well as the October producer price index from South Korea.
By the end of October, Japan stocks led the gains in the Asia-Pacific region a day after its central bank increased its yield curve control policy flexibility, showcasing a positive market update for the country.
How did October finish for Asian markets?
- Japan’s Nikkei 225 index is up 2.41% at 31,601.65, and the Topix added 2.53% at 2,310.68 to hit its highest level in nearly three weeks.
- South Korea’s Kospi is up 1.03% at 2,301.56, and the Kosdaq climbed 0.43% to 739.23.
- Hong Kong’s Hang Seng index fell slightly in its final hour of trade, and China’s CSI 300 index fell marginally, closing at 3,571.03.
UK Market update – October 2023 Overview
In October, Britain’s financial markets experienced a difficult month, with the FTSE 100 and FTSE 250 experiencing significant shifts. The FTSE 100, dominated by commodity-related stocks, encountered its worst monthly performance since May.
The FTSE 100 index slipped 0.1% for the month, primarily due to a 4.6% drop in BP shares, which reported lower-than-expected quarterly earnings, mainly affected by the decline in energy prices. The aerospace and defence sector offered some relief, with a 1.8% gain overall. In that sector, the leading stock – Rolls-Royce also increased by 6.6% last month.
Howver, the mid-cap FTSE 250 saw an overall decline in October of 6.5%, marking it as its worst month in over a year. In addition to the market developments, there were indications of slowing inflation in British retail chains, as prices increased at the slowest pace in more than a year.
This data surfaced before the Bank of England’s policy meeting, where the central bank has held interest rates at their current level. These events highlight the mixed performance and uncertainties prevailing in the UK’s financial markets during October.
European Market update – October 2023 Overview
European stock markets closed higher at the end of October as investors kept a close watch on economic indicators from Germany and US market developments. The pan-European Stoxx 600 concluded the month with a 0.4% gain, with most sectors showing positive performance, particularly healthcare. Nevertheless, the index was still on track for a 4.6% monthly decline, as indicated by LSEG data, primarily due to underwhelming earnings reports and concerns about persistent elevated interest rates.
Investors closely monitored crucial inflation data, with Siemens Energy shares continuing to recover amidst ongoing discussions concerning project-related guarantees. Equities were aided by a drop in euro-area sovereign bond yields, suggesting markets had broadly factored in the expectation of enduring higher interest rates.
Inflation data revealed a slight easing in Germany’s most populous state, North Rhine-Westphalia, for October, while Spain’s 12-month inflation remained unchanged at 3.5%. The German economy faced challenges in the form of a slight contraction in the third quarter, attributed to weak purchasing power and persistently high-interest rates.
Furthermore, European inflation data was under scrutiny following the European Central Bank’s decision to leave interest rates unchanged in the preceding week.
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As usual, with any market update, our recommendation persists: Investors should maintain a well-diversified portfolio emphasising high-quality assets and consider the long-term outlook.
Please contact Brite if you have any questions about this market update or want to learn more about Brite and how we can maximise your pension and investment assets. Our experienced advisory team is here to help you make more informed decisions.