Is May a good month for the equity markets? Well, the US markets are likely to close quite strongly this month, it is the global picture that looks a bit shady. The UK, France, Japan, China, and New Zealand equity markets have hit multi-week lows.

Nasdaq 100 is up by 8%, S&P 500 by 5% and Dow 30, the barometer of the US economy is up by almost 1.5% over the last 4-weeks. “The adage ‘Sell in May and go away’ reflects the tendency for markets to experience lower trading volumes and increased volatility during this period. However, there are many instances where markets have performed well during the summer, especially when economic fundamentals and policy environments were favorable,” says Nigel Green, CEO, deVere Group.

The global scenario is appearing much murkier. In a wave of recent declines, global stock markets outside America have hit notable lows, driven by various economic pressures and investor sentiment. Here’s a comprehensive look at the current market landscape.

United Kingdom: FTSE 100 Index Hits 4-Week Low

The United Kingdom’s stock market index, the FTSE 100, has fallen to a four-week low, reaching 8,152.00 index points. Despite this recent dip, the index has shown resilience over the past month, gaining 0.76%, and a significant annual increase of 9.9%. Despite temporary volatility, this result shows underlying strength in the UK market.

France: CAC 40 Index Hits 4-Week Low

Similarly, France’s stock market has seen its CAC 40 index decrease to a four-week low of 7,916.00 index points. Over the past four weeks, the index still managed a modest gain of 0.26%, and over the last 12 months, it has increased by 11.78%. This suggests that while the French market is experiencing current lows, its long-term growth remains robust.

Japan: Nikkei and Topix Hit One-Month Lows

Japanese markets have not been immune to global pressures, with the Nikkei 225 Index dropping 1.3% to close at 38,054, and the broader Topix Index falling 0.56% to 2,726. This decline is influenced by the rising global bond yields and expectations of a potential interest rate hike by the Bank of Japan. The benchmark 10-year government bond yield in Japan has reached 1.1%, the highest since July 2011, contributing to a stronger yen and market caution.

China: Shanghai Composite Index Sees Decline

The Shanghai Stock Exchange Composite Index in China has decreased to a four-week low of 3,088.00 index points. Over the past four weeks, the index lost 1.67%, and over the last year, it has decreased by 3.63%. This decline reflects ongoing economic challenges and investor concerns in the Chinese market.

New Zealand: S&P/NZX 50 Index Hits 2-Week Low

In New Zealand, the S&P/NZX 50 index dropped 1.04% to 11,557, marking its lowest level in two weeks. This decline follows losses on Wall Street and comes amid the New Zealand government’s 2024 budget report, which introduces modest tax relief and reduced spending to address sluggish economic growth and rising unemployment. The budget also includes the first adjustment to the country’s tax threshold in 14 years, promising $14.7 billion in tax relief.

“Institutions like the International Monetary Fund (IMF) and Bloomberg have recently revised their global economic forecasts upwards, further fuelling investor confidence. This positive outlook is underpinned by strong economic indicators, particularly in the US. The economic revival is not confined to the United States.

China, the world’s second-largest economy, is showing signs of a rebound. Concurrently, Europe is beginning to display promising economic activity, adding to the buoyancy of the global economic landscape.

This synchronized trajectory across major economies strengthens the overall positive sentiment in international markets – even though it probably means rates will remain elevated, causing short-term jitters,” adds Green.