Markets In Focus: March market snapshot

In March 2024, despite mixed inflation signals, global equity market sentiment remained positive. Investors closely monitored these signals as they could influence central banks’ decisions on rate-cuts.

In the US and South Africa, investors disregarded the uptick in February inflation figures. This was because the US Federal Reserve reassured markets that it remained on track for three interest rate cuts totalling 75 bps this year. However, US inflation data for February 2024, released in March, unexpectedly rose to 3.2% year-on-year from 3.1% in January 2024. In South Africa, February 2024 CPI touched a four-month high at 5.6% year-on-year against January’s 5.3%.

There were stronger indications of easing inflation in Europe, encouraging the Swiss National Bank to cut its interest rate by 25 bps. In Japan, after years of economic stagnation, an increase in inflation to 2.8% was welcomed. The upbeat sentiment was reinforced by an upward revision to Q4 2023 GDP, which allayed fears that the Japanese economy had moved into recession at end-2023.

The S&P 500 index gained 3.1% during the month as buying broadened beyond the “Magnificent Seven” to other artificial intelligence (AI) tech, financial and industrial shares. According to research from Bank of America (BofA), two-thirds of US fund managers expect a “soft landing” for the US economy in the next 12 months.

The JSE All-Share Index, lifted by 3.23% for the month, was boosted by precious metals shares. Gold rallied in the second two weeks of March 2024 to $2259/oz from around $2150/oz on expectations of US interest rate cuts. Platinum rose by 3.5% in the month and palladium by 7.4%. Gains in heavily weighted Prosus and Naspers, reflecting strength in their biggest holding, Tencent in China, also lifted the index.

Markets ended higher for the month in Europe, especially Germany and France, and in the UK. Japan’s Nikkei index touched an all-time peak of 41 087 on 21 March, reflecting hopes of looser monetary policy.

The rand strengthened slightly from its end-February levels to R18.94/$ on 28 March, resulting in a 1.882% monthly appreciation in a rand investment in the MSCI World Net Index.

Table 1: Total returns to 31 March 2023