Market Commentary March 2020
02 April 2020
COVID-19 has dominated the markets in recent weeks with the FTSE 100 Index falling nearly 14% in March. Coordinated action from governments and central banks around the globe in an attempt to mitigate the impact of the virus has seen the likes of the Bank of England cut the bank rate to 0.1% and the US launch a $2 trillion stimulus package.
Markets also benefitted from further support from central banks, such as the Federal Reserve, which pledged to buy an unlimited amount of both US Government and corporate bonds.
Whilst volatility remains, the markets responded well to the actions taken so far with the FTSE 100 index rising by more than 13% from its month low on 23 March – a headline you are unlikely to see on the evening news.
Warren Buffet, considered one of the most successful investors in the world, once said ‘Be fearful when others are greedy and greedy when others are fearful’ and there have been tentative signs of investors purchasing risk assets.
It’s times like this we should be mindful of some of the ‘golden rules’ of being invested in the markets:
- Don’t try to time the markets
- Stay invested for the long term
- Hold a diversified portfolio
- Understand what you are investing in
- It’s not a loss unless you sell
- Don’t panic.
For the month of March the top FTSE 100 rising stocks were:
- Polymetal International PLC +3.89%
- Ocado Group PLC +3.82%
- Hikma Pharmaceuticals PLC +3.76%
Only a handful of FTSE 100 stocks showed positive returns for the month. Shares in Polymetal International PLC, the precious metals firm, strengthened on the back of signing a gold concentrate sales deal with an Australian miner.
For the month of March the top 5 FTSE 100 falling stocks were:
- Carnival PLC -61.17%
- Melrose Industries PLC -58.37%
- International Consolidated Airlines Group SA -53.58%
- Centrica PLC –52.14%
- Meggitt PLC –51.41%
The leisure sector suffered further as the month progressed with cruise operator Carnival PLC shedding 61% of its market value. This follows up last month’s 23% decline in the Carnival PLC share price.
On the currency markets, Sterling retreated following the Bank of England reducing its rate to the historic low of 0.1%
| 31 March 2020 | 1 month | 6 months | 12 months | 24 months | 36 months | 48 months | 60 months | |
|---|---|---|---|---|---|---|---|---|
| FTSE 100 | 5,671.96 | -13.81% | -23.44% | -22.08% | -19.62% | -22.55% | -8.14% | -16.26% |
| GBP / USD | 1.2420 | -3.13% | 1.07% | -4.70% | -11.40% | -1.04% | -13.52% | -16.18% |
| GBP / EUR | 1.1258 | -3.17% | -0.17% | -3.11% | -1.04% | -4.47% | -10.79% | -18.47% |
This newsletter is intended to provide a general review of certain topics and its purpose is to inform but NOT to recommend or support any specific investment or course of action.
Figures refer to the past and past performance is not a reliable indicator of future results. You may not get back the full amount of your investment.
Sources of information as at close of business 31 March 2020.
FTSE 100: www.investing.com
Currency: www.investing.com
FTSE 100 Risers & Fallers: www.sharesmagazine.co.uk
Inflation & Interest rates: www.bankofengland.co.uk
