March 2023

• Global markets experienced heightened volatility in March following banking sector turmoil in the United States and Europe.
• Concerns surrounding regional bank stability triggered sharp declines in financial stocks and significant movements in bond markets.
• Central banks introduced emergency liquidity measures to stabilise financial systems while continuing efforts to combat inflation.
• Bond yields declined sharply as investors anticipated slower future interest rate increases.
• Technology and defensive sectors outperformed during periods of market uncertainty.
• Commodity prices weakened due to concerns regarding financial stability and slowing global growth.

Asia (ex. Japan)

Asian markets outside Japan experienced volatility during March as global banking sector concerns affected investor sentiment across financial and cyclical sectors.

Chinese markets remained relatively resilient due to ongoing reopening momentum and supportive domestic economic conditions, while technology exporters in Taiwan and South Korea benefited from falling global bond yields.

Europe

European equities weakened sharply during March following concerns surrounding the stability of major financial institutions, including the forced takeover of Credit Suisse.

Banking sectors across Europe experienced heavy volatility as investors worried about broader financial contagion risks despite rapid intervention by regulators and central banks.

United States

U.S. equities experienced significant volatility during March after the collapse of several regional banks triggered fears regarding financial system stability and tighter credit conditions.

The Federal Reserve introduced emergency lending facilities to stabilise banking markets while continuing with additional interest rate increases aimed at combating persistent inflation.

United Kingdom

UK equities delivered mixed performance during March as global banking sector concerns weighed on financial stocks, though broader market weakness remained more limited than in some other regions.

Investors closely monitored inflation trends and the Bank of England’s policy outlook amid growing concerns regarding financial stability and slowing economic growth.

Japan

Japanese equities remained relatively resilient during March as defensive positioning and supportive monetary policies helped limit broader market declines.

The Bank of Japan maintained ultra-loose monetary conditions under incoming Governor Kazuo Ueda, though investors continued speculating about future policy normalisation.

Emerging Markets

Emerging markets delivered mixed results during March as global banking concerns and tighter financial conditions reduced investor appetite for higher-risk assets.

However, falling U.S. bond yields and ongoing Chinese reopening support helped stabilise sentiment across parts of Asia and commodity-exporting economies.

Commodities

Commodity prices weakened during March as banking sector turmoil and recession fears reduced expectations for near-term global demand growth. Oil prices declined sharply due to concerns regarding slowing economic activity.

Industrial metals also weakened amid broader risk aversion, while gold prices rallied strongly as investors sought safe-haven assets during financial market volatility.