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Monthly Investment Market Update - September 2014

06 October 2014

Key financial news, economic events and market returns in September.

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UK Large Cap Equity graph UK Large Cap tables

KEY THEMES

World stockmarkets were volatile over the month as worries over an early interest rate rise in the US and increasing military action in the Middle East weighed heavily on investor sentiment. Poor economic data from China coupled with political unrest in Hong Kong led to a sell-off in emerging markets which were down 7.6% over the period. European equities were boosted by further stimulus measures announced by the European Central Bank. The euro continued its decline against all major currencies.

UK

Scotland voted ‘yes’ to remain in the UK in the independence referendum that threatened the future of the 307 year union and risked a period of political and financial turmoil.

After counting through the night, 55% of Scottish voters supported the ‘no’ campaign compared with 45% who backed independence. The pound surged ahead of the result, which gave the ‘Better Together’ campaign a wider margin of victory than suggested in opinion polls.

Eurozone

Mario Draghi signalled at least €700 billion of fresh aid for the moribund European economy and left a fight with Germany over sovereign bond purchases for another day. Pledging to “significantly steer” the European Central Bank’s balance sheet back toward the €2.7 trillion of early 2012 from €2 trillion now, the ECB president announced a final round of interest rate cuts and a plan to buy privately owned securities.

China

China’s central bank joined its European counterpart in boosting liquidity to address weakening growth, underscoring a divergence in direction among the world’s biggest economies as the US reduces stimulus. The People’s Bank of China is injecting 500 billion yuan ($81 billion) into the nation’s largest banks, signalling the deepest concern yet with an economic slowdown.

This information has been reproduced by kind permission of Bloomberg and does not necessarily reflect the opinions of St. James’s Place Wealth Management. St. James’s Place considers the information to be reliable but it is not intended to provide a sufficient basis on which to make an investment decision. Data aligned to end of September 2014. The ‘St. James’s Place Partnership’ and the titles ‘Partner’ and ‘Partner Practice’ are marketing terms used to describe St. James’s Place representatives. Members of the St. James’s Place Partnership represent St. James’s Place Wealth Management plc, which is authorised and regulated by the Financial Conduct Authority.

Some of the products and investment structures documented within this article will not be available to our clients in Asia. For information on the funds that are available please get in touch.

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