These were the FTSE 100’s dogs and stars in April!
April was a good month for the FTSE 100. The index rose by 3.1% this month, taking its gain for 2023 to 5.6%. This means that the UK blue-chip index beat the US S&P 500 (+1.5%) in April. However, the US index has risen by 8.6% in 2023, pushed higher by soaring mega-tech stocks.
Risers and fallers
Though the Footsie was up this month, not all of its members followed suit. This is unsurprising, given the wide variety of stocks in the index.
Some 82 of its 100 shares climbed this month. These gains range from 0.1% to 19.7%, with the average increase being 6.1%.
At the other end of the scale lie 18 FTSE 100 losers. Declines at these laggards range from 0.1% to 17.1%, with the average fall being 4%.
The FTSE 100’s April stars
These are the Footsie’s biggest risers since 31 March:
Gambling & betting
Smith & Nephew
Finance & insurance
Land Securities Group
Top performer Entain saw its shares leap following a positive Q1 trading update by the owner of bookmakers bwin, Ladbrokes and Coral.
Shares in orthopaedics firm Smith & Nephew crashed during the Covid-19 crisis as surgeries were cancelled worldwide. But a recent trading update pushed up this stock after a weak March.
Two other strong risers — Segro and Land Securities Group — saw their shares rise as investor sentiment around commercial property improved, with rents rising and asset values perhaps starting to stabilise.
The Footsie’s dirty dogs
Now for the index’s worst performers this month:
Three of these stocks stand out, as they’re all mining companies. Fears of weaker Chinese demand for base metals and other commodities has dealt a blow to mining stocks over the past three months.
By the way, my wife and I own shares in mega-miner Rio Tinto in our family portfolio. At their 52-week high, they hit 6,406p on 26 January, but have since dropped by 21.2%. Ouch.
The worst performer — engineering firm Melrose Industries — saw its stock fall sharply this month. However, this is a technical issue following the demerger of a company from Melrose, plus a three-for-one stock consolidation.
What next for UK shares?
Lacking a crystal ball or other fortune-telling device, I don’t make predictions about the FTSE 100’s near-term movements.
That said, a 5.6% return in four months works out to 1.4% a month — well above the index’s long-term capital gain. Over the last 20 years, it has risen by 0.3% a month, excluding cash dividends.
Even so, the Footsie looks cheap to me today, both in historical and geographical terms. Hence, despite high consumer-price inflation and the rising risk of a UK recession, I want to keep buying undervalued UK shares. Now if only I had more spare cash to invest!
The post These were the FTSE 100’s dogs and stars in April! appeared first on The Motley Fool UK.
Cliff D’Arcy has an economic interest in Rio Tinto shares. The Motley Fool UK has recommended Admiral Group Plc, Land Securities Group Plc, Melrose Industries Plc, and Smith & Nephew Plc. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services, such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool, we believe that considering a diverse range of insights makes us better investors.
Motley Fool UK 2023