October’s Performance Overview
- Equity markets performed strongly during October after successfully testing year-to-date lows early in the month.
- Once again markets rallied ahead of any specific news flow reflecting the significant level of risk aversion being discounted across risk assets.
- A package put forward by the European Union on 26 October, including bank recapitalisations, a leveraged EFSF, a “soft” restructuring of Greek debt and a new insurance scheme covering peripheral sovereign debt was well received by investors, particularly in European equity markets.
- Commodity prices were particularly volatile, following their significant decline in September and
finished the month higher while the macro data from the US generally surprised the market on the upside,
reducing the risks of a hard landing.
- After an extended period of risk reduction, investors looked to add risk to portfolios with the Energy, Banks and Resource sectors outperforming while the more defensive Telecom, Staples, Healthcare and Utility sectors all lagged.
- The Australian equity market (ASX 200) finished up 7.2%, with all sectors except Telecoms trading higher.
Download the Wrap Up of the Market for October 2011 here.