Global stock markets rose 0.23%1 over the quarter.
The third quarter had its rocky moments: following the Bank of Japan raising interest rates investors retreated from the ‘yen-dollar carry trade’2, the rally in some tech shares stalled when their profit outlooks weakened in July, and weaker US economic data briefly raised fears for a recession. But a broad rally boosted markets for most of the quarter, buoyed by earnings reports, reassuring inflation readings and interest rate cuts by many central banks.
Q3 sector returns were led by Utilities, partly due to interest rate falls and partly on the hope that power-hungry artificial intelligence will drive a surge in electricity demand and transform growth expectations for the sector. Materials and Industrials also performed strongly through the quarter, while Energy and Information Technology (IT) lagged.
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1 Bloomberg as at 30/09/24, measured by the MSCI World Net GBP Index.
2 A currency carry trade is where traders borrow in a low interest rate currency and invest the proceeds in a high interest rate currency.
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