Your Market Update - Summary
After a positive start to the year, global market sentiment shifted in March as rising geopolitical tensions disrupted shipping routes and raised concerns around global energy supply. Coordinated strikes in the Middle East increased uncertainty, pushing oil prices higher and prompting a broad sell‑off in risk assets.
The resulting rise in energy prices reignited inflation concerns and challenged earlier expectations that inflation pressures were easing steadily. As a result, markets became more volatile as investors reassessed growth, interest‑rate and earnings assumptions.
International equity markets declined across most major regions. European and Asian markets were more heavily impacted due to their higher exposure to rising energy costs, while US markets proved relatively more resilient. Emerging markets also weakened amid higher oil prices, a stronger US dollar and softer investor sentiment.
Australian shares fell sharply over the month, with broad‑based weakness across most sectors. Materials stocks declined as bulk commodity prices softened, while technology and real estate were pressured by higher interest‑rate expectations and ongoing global growth concerns.
In contrast, energy stocks performed strongly, supported by higher oil prices, while utilities also delivered positive returns due to their more defensive earnings profiles and links to energy markets.
Australia’s reliance on imported fuels and fertiliser amplified the impact of energy price increases, lifting input costs across parts of the economy and weighing on more cyclically exposed sectors.
Australian and global fixed interest markets declined over March as higher oil prices added to inflation concerns, pushing bond yields higher and prices lower.
Credit markets weakened as spreads widened, meaning investors demanded a higher return to hold corporate debt relative to government bonds. While conditions remain orderly, the shift reinforces the importance of quality and selectivity within fixed interest allocations.
The investment landscape has become more complex as renewed energy‑driven inflation risks, geopolitical uncertainty and structurally higher government debt levels challenge expectations for early interest‑rate relief.
In this environment, balance and diversification remain key. Infrastructure and other real assets continue to demonstrate resilience, supported by inflation‑linked revenues and stable long‑term cash flows. Within fixed interest, higher‑quality exposures and domestic duration continue to provide stability, while credit markets warrant a more selective approach.
Importantly, the foundations for long‑term growth remain firmly in place. Ongoing investment in innovation and artificial intelligence continues to support productivity and earnings growth, and periods of volatility can create opportunities across regions and sectors.
Maintaining a disciplined, long‑term approach focused on quality, resilience and alignment to personal objectives remains central to navigating uncertain market conditions.
