Global shares

Global share markets fell sharply in the March quarter, with the MSCI ACWI Net Index returning -10.5% in unhedged New Zealand dollar (NZD) terms. In hedged NZD terms, the Index returned -20.8%. Stocks actually began the quarter well, thanks in part to improving Sino-US trade relations and the subsequent signing of their ‘phase one’ trade agreement, news the US economy expanded in line with expectations in the final quarter of last year and some encouraging US and European earnings updates. However, share markets reversed direction drastically toward the end of February and continued their slide through March as the rapid spread of coronavirus globally forced governments to impose strict containment measures. This included the shutdown of all non-essential services and activities, which had the effect of bringing parts of the global economy to a near standstill. Compounding the threat posed by the coronavirus pandemic was a steep decline in oil prices, which fell almost 67% on concerns a new price war between major producers Saudi Arabia and Russia would see supply spike at a time when demand was falling.