HSBC update

Geopolitics again shaped markets in Q3, with sentiment shifting from hopes of stabilisation to renewed tension. The early quarter breakdown of the US Iran agreement and shipping disruptions in the Strait of Hormuz raised concerns about energy supplies and inflation. Despite this, global equities gained 1.5% in GBP. Developed markets (+1.7%) outperformed emerging markets ( 0.4%), as semiconductor related equities sold off in countries such as South Korea and higher oil prices pressured oil importing economies. Japan (+5.9%) led developed markets, supported by economic growth, while US equities (+2.2%) benefited from solid earnings. Europe ex UK ( 2.7%) surrendered earlier gains because of its greater energy price sensitivity. The UK (+1.8%) performed better, supported by its substantial energy exposure.