Average market behaviour in March

The following chart plots the average performance of the FTSE 100 Index during March since 1984 (more info on this type of chart).

Average month chart - March (2014)As can be seen, historically the market has generally risen gently for the first three weeks of March, and then fallen back a little in the final week and a half.

February 2014

The following chart shows the average performance of the market in February (1984-2013) and overlays the actual performance in February 2014.

Average month chart - February overlay February 2014 (2014)

In February 2014 the big difference from the average February was the big bounce back in share prices after the weak January.

 

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Strong/weak sectors in March

Strong sectors

The table below lists the sectors that have historically out-performed the market in March.

Sector TIDM
Financial Services
General Industrials
General Retailers
Industrial Engineering
Oil & Gas Producers
Oil Equipment, Services & Distribution

Weak sectors

The following table lists the sectors that have been weak in March.

Sector TIDM
Gas, Water & Multiutilities
Health Care Equipment & Services
Nonlife Insurance

 

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The Stock Market in March

March is a middling month for the share market, ranking 7th of all months in performance. Since 1984 the market has risen in 59% of years with an average return of 0.7% in the month.

Monthly returns of FTSE All Share Index - March (1982-2013)

The general trend for the market in March is to rise for the first three weeks and then fall back in the final week – the last week of March has historically been one of the weakest weeks in the whole year.

March marks the end of the 3-month period when mid-cap stocks strongly out-perform large caps: on average the FTSE 250 index has out-performed the FTSE 100 Index by 0.8 percentage points this month.

Sectors

In the last twenty years the sectors that have been strong in March have been: Financial Services, General Industrials, General Retailers and Industrial Engineering; while the weak sectors have been: Gas, Water & Multiutilities, Health Care Equipment & Services and Nonlife Insurance.

Stocks

For companies, the following FTSE 350 shares have performed well in March over the last ten years: Aggreko, Restaurant Group, IMI and Cobham; the shares of these companies have risen in March for nine of the past ten years and one company, Intertek, has risen in all ten. The shares that don’t seem to like March are: Aviva, RSA, Renishaw, RBS and HSBC; these shares fallen in March in at least eight of the last ten years.

Diary

This is a busy month for results announcements – 29 FTSE 100 companies announce their preliminary results in March (as do 74 FTSE 250 companies).

Quite a busy month on the economics front: MPC interest rate announcement on the 6th, US non-farm payrolls on the 7th, FOMC meeting starting on the 18th, and the chancellor’s budget expected on the 19th.

The results of the quarterly FTSE 100 index review will be announced on the 12th; it’s difficult to predict these things too far in advance, but at the time of writing the position of William Hill in the index is looking precarious, potentially to be replaced by St James Place. It’s triple witching on the 21st, so be on the lookout for increased volatility on the day.

The 6th March will mark 14 years since Vodafone hit its all-time high price of 399 (it’s still 44% below that high). And, to end on a cheery note, 12 March will be the 30th anniversary of the declaration of the 1974 national coal strike by Arthur Scargill.


Article first appeared in Money Observer

Further articles on March.

 

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First trading day of March

Next Monday will be the first trading day (FTD) of March.

As explained in the 2014 edition of the Almanac, the market has a tendency to be strong on the FTD of a month. And this effect has been even more pronounced in recent years.

Since 1984, the FTSE 100 Index has a return average of 0% on the March FTD, which makes it the second weakest FTD of the year. However, as can be seen from the chart, the average performance is greatly influenced by the fall of over 5% on the March FTD in 2009.

The following chart shows the returns for every March FTD since 1984.

FTSE 100 first trading day of March (1984-2013)

 

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Shares that like/dislike March

Shares that like March

The following table lists the five FTSE 350 shares that have the best returns in March over the last ten years. For example, Aggreko has an average return of 11.7% for the month of March. Each stock has risen in March in at least nine of the past ten years; Intertek is the only FTSE 350 company whose shares have risen in every March for the past ten years.

Company TIDM Avg(%)
Aggreko 11.7
Restaurant Group (The) 11.4
Intertek Group 9.2
IMI 7.9
Cobham 6.1

Shares that dislike March

The following table lists the five FTSE 350 shares that have the worst returns in March over the last ten years. For example, Aviva has an average return of -7.7% for the month of March. All five stocks have fallen in March in at least eight of the past yen years.

Company TIDM Avg(%)
Aviva -7.7
RSA Insurance Group -4.3
Renishaw -3.7
Royal Bank of Scotland Group (The) -3.2
HSBC Holdings -3.1

An equally-weighted portfolio of the above strong March stocks would have out-performed every year an equally-weighted portfolio of the above weak March stocks by an average of 13.7 percentage points in March for the past ten years.

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Last trading day of March

Today is the last trading day (LTD) of March (and therefore also the last trading day of the first quarter).

As explained in the 2013 edition of the Almanac the LTDs of months used to be stronger than average, but in recent years they have been weak. This is quite different from the first trading days of months which strongly out-perform the average for all days, and where the effect has strengthened in recent years.

Since 1984 the market has on average risen 0.12% on the LTD of March, but it is not one of the stronger month LTDs of the year.

Since 2000, however, it has been the third strongest month LTD, with an average return of 0.26% on the day.

The following chart shows the FTSE 100 Index returns for every March LTD since 1984.

March last trading day returns for 1984 to 2012

 

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Average market behaviour in March

The following chart plots the average performance of the FTSE 100 Index during March since 1984 (more info on this type of chart).

The chart shows that on average the UK market climbs for the first three weeks of the month and then falls back towards the end of the month.


 February 2013

The average chart for February was posted a month ago here. The following reproduces that chart and overlays the actual FTSE 100 for February 2013.

FTSE 100 average chart for February

Despite the excitement of the UK losing its AAA rating and the Italian election, the month was pretty average from a historic viewpoint. The index reached the month’s high on the 14th trading day of the month (historically the high has been reached on the 12th trading day), and then came off slightly to end up 1.3% on the month (historically the index has risen 1.2% in February.)

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First trading day of March

Tomorrow, Friday 1 March, will be the first trading day (FTD) of March.

As explained in the 2013 edition of the Almanac, the market has a tendency to be strong on the FTD of a month. And this effect has been even more pronounced in recent years.

The March FTD has been one of the weaker ones of any month in the year. Since 1984 the average return on the March FTD has been -0.02%, and the market has risen in 57% of years. Since 2000 the average return has been 0.02%

The following chart shows the returns for every March FTD since 1984.
First Trading Day of March (1984-2012)

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