Global investment market review: April 2026

In April, the MSCI ACWI Index, a representative measure of global equities across developed and emerging markets, added 6.9% in sterling terms and 9.4% in local currency terms. Asia Pacific, emerging markets and the US were the strongest-performers, but all main regional markets gained ground. Growth outperformed value, but both were up over the month. Despite ongoing geopolitical conflict, equity markets market sentiment was positive, with strength among AI-related stocks in particular. In fixed income, the ICE BofA Global Government Index declined 2.0% in sterling terms and was just 0.1% lower in local terms. Sterling regained some of the ground lost against the US dollar since the start of March.

Crude oil futures prices remained choppy, falling back over the first half of the month on hopes for a peaceful resolution to conflict in the Middle East and the potential opening of the Straits of Hormuz before rebounding to finish the month higher overall when pessimism returned. European gas futures saw a similar see-saw in prices, but did not rebound as strongly, losing ground over the month as a whole.

The FTSE 100 Index, a commonly used representative benchmark of the UK’s largest equities, rose 2.3%. The FTSE All Share Index was up 2.8%, led by a strength in mid-cap stocks. The UK market’s advance trailed other developed markets given its limited exposure to large-cap technology stocks. The Bank of England’s Monetary Policy Committee kept interest rates steady in an 8-1 majority vote, with one dissenter looking to increase interest rates, while several other policymakers believed such a move could be appropriate in the future. The market increasingly started to expect a rate increase over the coming months. The UK’s annual inflation jumped back from the 3.0% rate that it had hovered at for two months, with a reading of 3.3% in March, amid rising transport costs. Unemployment dipped from 5.2% to 4.9% in the three months to February, this move was thought to be partly part due to numbers leaving the workforce. The flash UK manufacturing Purchasing Managers’ Index (PMI) continued its improvement, to reach a 47-month high of 53.6 in April, helped by robust new orders. The UK services sector PMI also saw an improvement in initial figures for April. Note that a PMI reading over 50 indicates that the manufacturing or services sectors are likely to be expanding.

In US equities, the S&P 500 Index jumped 7.2% in sterling terms and 10.5% in US-dollar terms. The Nasdaq Composite Index, which has a growth focus, was 11.9% higher in sterling terms and 15.3% in dollar terms. Both the S&P and Nasdaq indices hit all-time highs during the month. First-quarter results season helped push stocks higher, with a high percentage of company earnings surpassing market expectations, including those in the technology sector. There was no change in interest rates as the Federal Reserve saw a split vote. However, the Fed said it was ready to act if risks started to hinder its policy objectives. Annual inflation jumped from 2.4% in February to 3.3% in March amid rising energy costs. The non-farm payrolls report rebounded from a weak negative reading of negative 133K in February, amid healthcare strikes, to record 178K job additions in March, beating expectations for 60K additions. Unemployment was nudged slightly lower, to 4.3% from 4.4%. The preliminary US manufacturing PMI for April moved up from 52.3 to 54.5 on strong improvements in output, in part because of stockpiling. The early services PMI reading also registered a slight improvement.

The MSCI Europe ex UK Index rose 4.5% in sterling terms. The Netherlands, Germany and Spain led returns in local currency terms. The European Central Bank (ECB) kept rates on hold as it continued to monitor the situation in Iran and its potential impact on inflation and economic growth. It noted short-term inflation expectations had jumped. Eurozone annual inflation stepped up to 3% in April, from 2.6% in March amid a surge in energy costs. Eurozone unemployment, dipped to 6.2%, hitting the low end of a ten basis-point range that it has hovered in since July 2024. February’s flash eurozone manufacturing PMI continued to improve, reaching its best expansion in almost four years with a reading of 52.2.

Despite ongoing geopolitical conflict, equity markets market sentiment was positive.

Japan’s equities, as measured by the MSCI Japan Index, added 5.9% in sterling terms. The Bank of Japan (BoJ) kept its policy interest rate at 0.75%, although 3 of its 9 members voted for a hike. Inflation edged up from 1.3% in February to 1.5% in March. Meanwhile, the BoJ revised its inflation outlook for 2026 from 1.9% to 2.8% on the back of rising crude oil prices. The manufacturing PMI increased further into expansionary territory in the initial reading for April, on heavy purchasing to limit potential disruption from supply-chain issues. Meanwhile, the flash services PMI moved lower. The yen regained ground against the US dollar on reports of supportive currency-market intervention by Japan’s authorities at month-end.

The MSCI Emerging Markets Index increased 11.3% in sterling terms and 13.3% in local terms. Korea, Taiwan and India advanced strongly, while Mexico, Brazil and Saudi Arabia weakened marginally in local currency terms. Taiwan’s stock market hit fresh highs during the month helped by expected AI demand for technology hardware businesses. The Reserve Bank of India (RBI) kept its benchmark interest rate at 5.25% against a backdrop of weakness in the rupee, growth and inflation concerns. Inflation stepped up slightly from 3.2% to 3.4% in March. In China, industrial production softened from a 6.3% year-on-year growth (y/y) to 5.7% in March. Exports only rose 2.5% y/y, following a 39.6% surge in the previous period. Imports, however, soared in March, growing 27.8% y/y compared with the previous periods increase of 13.8% y/y and expectations for a 11.1% y/y rise, as goods were purchased to minimise the impact of potential future supply disruptions.

The MSCI AC Pacific ex Japan Index gained 12.5% in sterling terms and 14.0% in local terms. At the country level, Korea, Taiwan and India rose, China and Australia were among the other markets to advance. In Korea, the market hit record highs on strength in the semiconductor segment and an improvement in manufacturing indicators. The Bank of Korea kept interest rates put at 2.5%. Similarly, Bank Indonesia held rates steady in April despite a further weakening of the rupiah. Australia’s annual inflation jumped up to 4.6% in March from the previous month’s reading of 3.7%, in part due to transport costs.

The UK market’s advance trailed other developed markets given its limited exposure to large-cap technology stock.

In April, government bonds were down marginally as inflation worries led to volatility. The 10-year US Treasury yield moved from 4.31% at the start of the month to 4.39% at month-end, proving relatively stable compared to several other developed markets, given expectations of the US seeing a smaller potential impact from energy price rises. The UK’s 10-year yield rose (prices fell) on inflation worries and expectations of higher policy rates over the coming months. Japanese government bonds also saw yields move higher on a growing belief that there could be interest rate increases in the near term. In credit, spreads narrowed on generally reduced risk sentiment across asset classes. Emerging market debt outperformed.

The FTSE EPRA Nareit Developed Index, a measure of the performance of Real Estate Investment Trusts (REITs), gained 5.3% in sterling terms and 6.6% in local currency terms. Note that REITs tend to be sensitive to interest rate expectations. During the month to end-March – the latest period with available figures – the MSCI UK Monthly Property Index was up 0.4%. The retail segment has been a relatively solid performer in recent quarters, amid increased footfall, reduced vacancy rates, and strength in retail parks and central London. The hotel segment, particularly in London, has also seen robust performance so far in 2026.

All index data are shown in total return sterling, unless otherwise stated
Source: FE Analytics