Globally the March quarter was notable for emerging signs of growth in industrial output in the US and the major European economies, Germany and France. Growth in China and other Asian economies was accompanied by concerns of a buildup of inflationary pressures.

Equities extended the rally that began mid last year as corporate profits continued to surprise on the upside. However, there was a brief selloff in equities as political unrest in the Middle East and North Africa unsettled investors. The pullback intensified following the massive earthquake and subsequent tsunami and nuclear damage in Japan in mid-March. By the end of the quarter, equities had shrugged off these concerns and rebounded strongly to finish in positive territory.

In Australia, overall the economy continued to expand in the March quarter; however the widespread floods of prior months are expected to reduce output in the first quarter of 2011. The S&P ASX 200 Index finished up 2.0% over the quarter, with energy the best performing sector. Since the end of quarter, resource and mining services stocks, in particular, have continued to add impetus to the index.

Download a pdf version of this report: 2011.04.15 Quarterly Economic and Market Commentary