Markets hoping for a more cheery start to the second quarter were let down as April bought continued conflict in the Middle East, more disappointing corporate data and mixed economic news. Global equity markets took the news flow badly, the benchmark FTSE World index falling sharply over the month.
In the US, April saw the vast majority of the constituents of the S&P 500 report first-quarter earnings and, while most met analysts' forecasts, markets were driven lower by the lack of forward earnings'projections. On a positive note, both Compaq and Sears Roebuck beat expectations and raised forecasts.
Overall US economic data pointed towards a moderate recovery. Against this corporate and economic picture, the Dow, S&P and the Nasdaq all finished lower, losing 5.1 per cent, 7.2 per cent and 10.4 per cent respectively over the month.
In Europe, equities fell despite further evidence of manufacturing expansion. The eurozone purchasing managers' index rose to over 50, its fifth successive monthly rise. However, poor sentiment in the telecoms sector dictated over the month.
In Germany, the banking sector fell on debt exposure fears after the collapse of media group Kirch and the IFO report on the economy came in weaker than anticipated. The Dax fell by 5.6 per cent. UK Q1 GDP growth came in at a disappointing 0.1 per cent and retail sales growth slowed. The blue-chip FTSE 100 index was dragged lower by tech and telecom issues.
In Japan, markets reacted well to a better Tankan survey, which showed that the economy had bottomed and was showing signs of picking up. Bank stocks fell shortly after the FSA released its report on the sector's bad debt problems and the yen, which reached a six-week high, hit the motors at the end of April. Nevertheless, good news outweighed bad and the Nikkei rose by 7 per cent.
In South-east Asia, Hong Kong's Hang Seng index also had a strong month on the back of positive broker recommendations, strong performance by the property sector and the outlook for US interest rates, gaining 3 per cent.
Elsewhere, Russia went from strength to strength, with oil stocks helping the market hit a four-year high.
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