Market Update – 10 October 2024

In this week's Market Overview, global equity markets ended the September quarter on a positive note, buoyed by a rate cut by the US central bank and new stimulus measures from China. The MSCI World Index saw significant gains, with emerging markets and Australian equities leading the way.

Market Overview

• Global equity markets ended the September quarter on a positive note, supported by a 50bp rate cut by the US central bank and stimulus announcements from China.
• The MSCI World Index gained 4.4% over the September quarter. Emerging markets gained 4.7%, while Australian equities outperformed, gaining 7.8%.

Global Equities

• Global DM equities (ex-Aus) returned -0.5% in September, with the 2.2% rally in the Australian dollar impacting unhedged returns.
• Emerging market equities performed strongly in September (+4.3%), driven by a 21% rally in Chinese equities post the stimulus announcements.

Australian Equities

• The ASX200 index returned 3.0% in September, driven by the 13% gain in the Materials sector. The rate-sensitive REIT (+6.6%) and IT (+7.4%) sectors also outperformed. Banks (-1.3%) and healthcare (-3.2%) underperformed the broader market in September.
• At the stock level, key contributors for the month were BHP (+16%), RIO (+16%), and GMG (+11%). The Main detractors were CPU (-11%), SDF (-11%), and REA (-8%). 

Real Assets

• Real assets outperformed in September, driven by lower bond yields. Domestic REITs gained 6.6%, while Global Real Estate and Global Listed Infrastructure gaining 3.8% and 3.5%, respectively.
• Gold gained 3.7% over the month.

Fixed Income

• Domestic (+0.3%) and Global (+1.1%) bonds generated positive returns in September. There were material moves in the US bond markets, with the 2-year U.S. Treasury yield falling 28 bps to 3.64% and the 10-year down 13 bps to 3.79%, leading to a 14 bps steepening in the yield curve.