The overall financial market trend in April showed renewed appetite for risky assets. Global equities gained 1.4% according to MSCI ACWI in local currencies. MSCI ACWI remained unchanged in April, in DKK. Generally higher equity indices were, however, led by defensive rather than cyclical sectors. High returns were generated by Consumer Staples/Health Care, while low returns were generated by Semiconductors/Consumer Discretionary. MSCI World Defensives yielded a return in April of 3.7%, outperforming MSCI World Cyclicals at 1.0%.
Banking turmoil affected the financial markets in March, leading to large yield declines on government bonds. This put risky assets under pressure until the US and European authorities set up lending facilities and loss guarantees. Intervention led to renewed risk appetite at the end of the month.
All-loss in February as opposed to all-gain in January, driven by the interest rate development in both months. In recent weeks, the financial markets have had renewed doubts about the ability of the major central banks to steer the synchronised monetary tightening cycle into a soft economic landing.
The negative sentiment returned to the financial markets in December. The development led to relatively large and broad-based losses on both risk-free and risk assets.
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