The global equity market index continued to move slightly higher in June, closing out a solid first six months of 2017. The S&P 500 closed 0.6% higher despite a late-month fall; although this was countered by weak equities across Europe. Asian emerging markets were also positive as the Shanghai Stock Exchange (SSE) Composite (+2.4%) and Hang Seng (+1.4%) both gained. Domestically, the S&P/ ASX 300 gained a modest 0.2% over June, led by the Financials and Health Care sectors. A resilient Australian dollar detracted from unhedged Australian investor returns as it rose against all major currencies.
AUSTRALIAN EQUITIES
The broad Australian equity market slightly rose over June, as the S&P/ASX 300 Accumulation Index increased 0.2% for the month. Returns were mostly positive across the market spectrum, with the highest positive performer being the S&P/ASX Small Ords, increasing 2.0% for the month. The sole negative performer was the S&P/ASX Mid 50 Accum, decreasing by 0.2% over the month. The best performing sectors were Healthcare (+6.1%) and IT (+1.9%). The weakest performing sectors were Energy (-6.8%) and Real Estate (-4.1%). The largest positive contributors to the return of the index were CBA, CSL and ANZ, with absolute returns of 4.0%, 6.9% and 3.0% respectively. In contrast, the most significant detractors from performance were Wesfarmers, BHP and Woodside Petroleum with absolute returns of -5.7%, -2.3% and -6.8% respectively.
GLOBAL EQUITIES
The broad MSCI World ex Australia (NR) Index was up 0.1% in hedged terms and down -2.6% in unhedged terms over the month, as the Australian dollar appreciated against the major currencies. The strongest performing sectors were Financials (+1.7%) and Healthcare (-0.3%), while Telecommunication Services (-5.9%) and Utilities (-5.3%) were the worst performers. In Australian dollar terms, the Global Small Cap sector decreased by -1.4% while Emerging Markets decreased by -2.0% in unhedged Australian dollar terms. Over June, the NASDAQ returned -0.9%, the S&P 500 Composite Index rose by 0.6% and the Dow Jones Industrial Average increased by 1.7%, all in US dollar terms. In local currency terms, major European equity markets experienced negative returns as the CAC 40 (France) decreased -2.7%, the DAX 30 (Germany) decreased -2.3% and the FTSE 100 (UK) decreased by -2.4%. In Asia, the Japanese TOPIX was up 3.0%, the SSE Composite (China) was up 2.4% and the Hang Seng Index was up 1.4%. The Indian BSE 500 decreased -0.2% over June.
CURRENCY MARKETS
The Australian dollar appreciated against major currencies over June, finishing with an increased Trade Weighted Index of 65.5 on 30 June 2017. The Australian dollar appreciated against the US dollar (+3.0%), the Euro (+0.9%), the Yen (+4.3%) and the Pound Sterling (+1.6%). On a trade-weighted basis, the local currency increased 2.7% over the month.
