Market Commentary

International markets showed solid resilience during April, despite a number of ongoing risks. These included geopolitical tensions between the US and Iran, persistently high oil prices, which reached an intraday high of around US$126 per barrel, and rising bond yields, all of which contributed to renewed inflation concerns.

Encouragingly, markets were supported by improving sentiment around a potential easing of tensions in the Middle East, as well as stronger‑than‑expected economic data from the United States. As a result, global markets remained broadly positive, even as volatility increased.

USA
US markets delivered a powerful performance in April, driven by a powerful earnings season and continued enthusiasm around technology and artificial intelligence. The Nasdaq led the way, rising by some 15%, while the S&P 500 gained around 10%, both reaching new record highs. The Dow Jones also performed well, rising by some 7% for the month.

Despite ongoing geopolitical risks and higher oil prices, investors focused on strong company earnings and the resilience of the US economy. Inflation edged higher, though interest rates were left unchanged as policymakers remained cautious. Overall, markets showed a strong ability to look through short-term uncertainty.

Europe
European markets rebounded during April following a weaker March. Germany’s DAX was a standout performer, rising by more than 7%, while France’s CAC gained close to 4% over the month.

Inflation in the eurozone increased, however, as energy prices surged, reaching around 3% due to higher oil prices linked to the Middle East conflict. This has created a more challenging environment, as higher energy costs can slow growth while keeping inflation elevated.

UK
The UK market showed steady gains, with the FTSE 100 rising by approximately 2% during April. Inflation increased to around 3.3% in March, mainly driven by higher fuel prices, highlighting how global energy shocks are feeding into everyday living costs. The Bank of England kept interest rates unchanged, balancing the need to control inflation with concerns about economic growth.

China
China’s markets were positive overall, supported by continued government stimulus and a focus on supporting growth. The Shanghai Composite rose by around 6% during the month.

Economic data showed that manufacturing activity remained in expansion, with the PMI at 50.3, indicating continued, but slightly slower growth. While manufacturing held up, services activity softened, pointing to a mixed but stabilising economic environment.

Japan
Japan was one of the strongest-performing markets in April, with equities rising by approximately 16%, supported by global demand for technology and AI-related companies. Inflation remains relatively low compared to other major economies, remaining below the central bank’s 2% target. This allows the Bank of Japan to maintain a supportive policy stance, although rising energy costs remain a key risk.

South Africa
The South African market showed a modest recovery during April after a difficult March, with the overall market rising by around 1%.

Performance across sectors was mixed. Property was the best performer (up around 4.4%), followed by financials and industrials (both up some 2.6%), while resources declined by approximately 2.7%.

Inflation increased slightly to around 3.1% in March, still within the SARB’s target range. However, this does not yet fully reflect the impact of rising fuel prices, which are expected to push inflation higher in the coming months. As a result, interest rates may remain higher for longer if inflation pressures persist.

What this means for your investments
The key takeaway from April is that markets remain resilient, even in the face of uncertainty. Strong company earnings, especially from global technology leaders, continue to support equity markets, while economic growth remains more stable than many expected at the start of the year.

At the same time, risks have not disappeared. Higher oil prices and geopolitical tensions are feeding into inflation, which means central banks are likely to remain cautious. This could result in interest rates staying higher for longer than previously anticipated.

In practical terms, this reinforces a few important principles for investors:

• Stay diversified across regions and asset classes, as different markets are responding differently to current conditions.
• Remain invested in quality companies, particularly those with strong earnings and pricing power in a higher inflation environment.
• Avoid over-reliance on cash, as long-term returns from equities continue to outpace more defensive assets.
• Expect more volatility but recognise that periods of uncertainty often create opportunities for long-term investors.

As always, our focus remains on managing risk carefully while positioning portfolios to deliver consistent, real (after-inflation) returns over time.