"World equity markets improved from their February and early March sell- off levels, but reacted negatively during the last week of trading during the quarter," says Howard Silverblatt, Senior Index Analyst at Standard & Poor's. "Political concerns over the United Kingdom/Iranian standoff pushed oil prices and oil stocks up, but as the tension subsided, expectation of a reduction in oil prices prevailed. Concerns are once again focused on the slowing global economy and inflation."
26 of the 27 developed world stock markets posted gains in March with an average return of 4.06%; Japan was the lone decliner, down 1.31%. The emerging markets were equally positive, with 23 of the 26 groups posting positive gains in March averaging 5.80%; Taiwan (-0.92%) Thailand (-2.81%) and Jordan (-7.86%) lost ground in March.
All 10 GICS sectors showed gains in March, with ex-U.S. telecommunications showing a 0.22% drop. The broad gain after the late February/early March declines were encouraging. Energy surged 5.74% due to mostly higher oil costs. Semiconductor and semiconductor equipment issues were down 1.74% during the month mostly due to U.S. performance. Outside of the U.S., the group was up 0.76% for the month.
The European Central Bank raised the benchmark refinance rate 25 bps to 3.75%, and The People's Bank of China raised its lending rate 27 bps to 6.39%. The Bank of England and the U.S. Central Bank held their rate at 5.25%, with the U.S. Open Market Committee signaling a move toward neutrality from their former tightening bias.
