Start of Second Quarter Heralds Lively Markets

In the wake of a warm reception of worldwide factory surveys, stocks have started the new quarter on a lively footing while falling sovereign bond yields have demonstrated uncertainty among investors.

March was a stabilising period for China’s economy prompting mixed base metal reports, boosting Shanghai equities towards new seven-year peaks.

Similar behaviour is being felt through US indices and fluctuations have risen through Asian trading where the S&P 500 future fell 1.2 per cent before reducing to 0.4 per cent.

Alert to the dangers of portfolio reposition early on in the quarter, industry experts have been reluctant attribute any clear reasons for the volatility.

A spokesperson for global bank Citi reflected on an active first day “despite the fact that many must still be completing their month-end, quarter-end and, for some, fiscal year-end activities and looking to wind down before the long weekend.” The release of the Federal Reserve’s first interest rate increase for ten years is unknown, and this may also be affecting investors’ moods.

The health of the Eurozone’s manufacturing industry - enjoying a ten-year high - has fuelled positivity in the region while contributing to a feeling that the slow-down is not as bad as analysts had anticipated.

Climbing 16 per cent last quarter and with a further rise of 1.7 per cent to an 8 year close peak, the Shanghai Composite has had a settling effect for news coming out of China which has helped support base metal prices. However, the price of iron ore has fallen to below $50 a tonne for the first time since the financial crisis.

The falling price in oil has been felt in Russia, which has also suffered sanctions on the back of military interferences in eastern Ukraine. Russian manufacturing PMI dropped for the fourth month running as commerce struggled to source capital.