Equity index at all-time high – but has since been pressured by rising interest rates
The benchmark equity index hit an all-time high in mid-February but then fell towards end-February due to rising interest rates.
Global equities gained 2.4% in local currencies and 2.7% translated into DKK according to MSCI ACWI. In February the increases were led by MSCI DM, up by 2.6%, while MSCI EM rose by 1% in local currencies. The rising interest rates created large differences in return across sectors. Equities relating to Energy/Materials and Financials/Insurance obtained the highest return, while equities relating to Utilities, Technology and Health generated the lowest returns.
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Negative returns across the risk spectrum in February
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.
November saw high returns across the risk spectrum
Almost all financial asset classes delivered high returns in November. This trend is most likely ascribable in part to consumer prices in the U.S. and Europe starting to show lower annual rates of increase in some areas.
From risk aversion to risk appetite in October
October was characterised by risk asset growth, while risk-free assets were more challenged. According to MSCI ACWI, global equities gained 5.1% in October, stated in local currencies, or 4.2% in DKK. At sector level, the returns were positive for all sectors except Real Estate, Consumer Discretionary and Communications. The returns were highest for Energy and Industrials.