Global equity markets delivered positive returns in June. The MSCI World ex-Australia Index rose by 2.3%.
Growth and inflation data in major economies revived market hopes for policy rate easing. Some developed economy central banks have started rate-cutting to support growth and ease inflation pressures.
USA
The US equity market continued upwards. The S&P 500 registered a 3.6% rise for June. This rise was led by Technology stocks, with other sectors (like Energy, Materials, and Utilities) underperforming the dominant Technology sector.
Europe
In Europe, the MSCI Europe index lagged other regions and returned -2.6% for the month. Markets were unsettled by European Parliamentary elections which resulted in a shift to the right and the snap election in France.
European stocks were also influenced by ongoing inflation concerns. This is in spite of the European Central Bank (ECB) cutting its interest rate from 4% to 3.75%.
Asia
Asian markets gained 3.9% in June. Taiwan led the region due to its significant technology exposure and AI-linked sentiment. Indian equities rebounded after election results tempered Prime Minister Modi’s political power.
Chinese equities fell 1.9% as investor sentiment and consumer spending remained weak despite government stimulus efforts.
Australia
The Australian equity market made modest gains in June. The ASX 300 rose by 0.9%. The Financial and Consumer Staples sectors led, but the Materials sector underperformed.
Australia remains an outlier compared to other major economies, with recent inflation data showing renewed signs of persistence. The Reserve Bank of Australia maintained the cash rate at 4.35%.
Currency and bonds
The Australian 10-year government bond yield declined to 4.31% while the U.S. 10-year government yield declined to 4.37%.
The Australian dollar strengthened over the month against major currencies, appreciating against the Euro (+1.7%), Japanese Yen (+2.8%), U.S. Dollar (+0.4%), and New Zealand Dollar (+1.3%).
Read the May 2024 Market Commentary.