Global sharemarkets delivered mixed results in April, with a sharp rebound in the United States offsetting more subdued gains in Australia and renewed volatility linked to the Iran conflict.
UniSuper head of fixed interest David Colosimo said the US market staged a significant recovery after weakness in March, despite ongoing geopolitical uncertainty and oil supply disruptions.
“Mixed fortunes is a great way to describe it,” he said.
“Let’s start with the US market, that’s the biggest market in the world— [which was] weak in March. But in April it recovered by more than 10 per cent. Now that’s the strongest monthly return in more than five years.”
The rebound pushed US equities back to record highs, even as the Strait of Hormuz remained closed and oil flows were disrupted, highlighting a divergence between geopolitical risks and market performance.
Colosimo said markets shifted focus away from the conflict and towards corporate earnings and renewed optimism around artificial intelligence.
“In the last couple of months, US earnings expectations just continued to increase despite the war, and the actual results during reporting season have also been pretty positive,” he said.
“By the time reporting season’s finished in a few weeks, it should show that aggregate US profits are up about 18 per cent over the past year. That’s the fastest growth since the pandemic rebound four years ago.”
Technology stocks led the rally, supported by strong demand for AI-related infrastructure and services, with semiconductor and mega-cap companies recording substantial gains.
“We’ve just had this remarkable strength in tech in April,” Colosimo said.
“At one point, the Nasdaq was up for 13 consecutive days. And the semiconductor index… it was up 38 per cent in April.”
The rebound extended beyond technology, with gains also recorded across financials, consumer stocks and industrials, reflecting resilience in the broader US economy.
Australian equities underperformed, rising modestly early in the month before weakening as oil prices rose and concerns about domestic economic conditions intensified.
“Australian shares… actually did start the month quite well, but turned sharply in the second half of the month and actually fell 10 out of the last 11 days,” Colosimo said.
A smaller technology sector limited the upside, while company-specific developments weighed on performance, particularly in healthcare.
“Cochlear fell 44 per cent after they slashed profit guidance. CSL also fell 12 per cent in the month,” he said.
Rising interest rates, higher fuel costs and signs of pressure on consumers further dampened sentiment, with major banks flagging higher provisions for credit losses.
Looking ahead, Colosimo said the trajectory of the Iran conflict and the reopening of the Strait of Hormuz would remain central to market direction.
“Every day this strait is closed, the world is having to run down inventories of oil by somewhere between 10 and 15 million barrels,” he said. “Every day it goes on, the problem gets more dangerous for global growth.”
Central bank policy is also expected to remain a key focus, with the Reserve Bank of Australia likely to continue tightening monetary policy amid persistent inflation pressures.
“Keep in mind Australia already has an inflation problem… I think it’s still too high for the RBA and most economists still expect another rate hike next week,” he said.
