Monthly Market Commentary - March 2022

Date Posted:Tue, 15th Mar 2022

Monthly Market Commentary - March 2022

Most global stock markets fell last month following a period of serious geopolitical tensions which ultimately resulted in the Russian invasion of Ukraine on 24th February. This caused another spike in commodity prices, including oil and gas, and intensified concerns about inflation and the economic outlook. It also overshadowed the more welcome news that the pandemic was continuing to wane in most countries with restrictions being relaxed further.

 

In terms of market returns, US indices were down by about 3% in GBP terms with Europe falling by around 6%. However, UK markets were essentially flat and benefitted from the significant weighting of oil and gas stocks in the index while other sectors such as technology and banks struggled. Elsewhere, commodities rallied sharply given concerns over an interruption of supply from both Russia and Ukraine in areas like gas, oil and wheat.

Within fixed income, index-linked gilts outperformed conventional gilts and corporate debt due to rising inflation expectations, although overall most bond markets made negative returns. However, gold prices were boosted by safe haven demand and were up about 6.5% on the month in GBP terms.

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