Market Analysis – June 2020
Major benchmarks closed the month in positive territory, as some economic data boosted sentiment towards the end of the month. A record jump in US housing sales and a fourth straight month of growth in Chinese manufacturing, served to offset some concerns over COVID-19 infection rates.
In the UK, the FTSE 100 gained 1.53% in June, to 6,169.74, the domestically focused FTSE 250 rose 0.45% in the month to close on 17,119.16. The Junior AIM index closed on 883.75, a monthly gain of 0.96%.The blue chip index closed Q2 up 8.78%, its biggest quarterly gain since 2010, as a host of global stimulus and an uptick in business activity as lockdown measures ease, strengthened optimism about a post-pandemic economic recovery. Concerns do exist, as local lockdown measures were imposed on Leicester due to virus flare-ups in the city.
On European markets, the Euro Stoxx gained 6.03% in the month and in Japan, the Nikkei 225 gained 1.88%. In the US, the Dow Jones advanced 1.69% in the month to 25,812.88, while the tech orientated NASDAQ returned 5.99% to finish June on 10,058.77. The Dow jumped over 17%, and the NASDAQ over 30% in Q2, marking these indices’ best overall quarters since 1987 and 2001, respectively.
On the foreign exchanges, sterling closed the month at $1.23 against the US dollar. The euro closed at €1.10 against sterling and at $1.12 against the US dollar. Gold is currently trading at around $1,783 a troy ounce, a gain of 3.09% on the month. Investors are keeping the precious metal in bullish territory despite a surge in risk appetite. Brent Crude is currently trading at around$41 per barrel, a gain of around 15% on the month. A recent poll, highlights expectations of a modest recovery in oil demand in Q3 and a stronger rebound towards the end of the year and into next, as oil demand is expected to pick up.
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