World-beating FTSE 250 tops the charts in August

We round up the stock market action during the past month as UK equities take the crown.

The United Kingdom’s second index the  FTSE 250 has outperformed the rest of the world’s major indices in August.

The domestically focused index of Britain’s 250 largest companies outside the top 100 grew 4.52% in the month to the 25 August to top the growth charts.

Investors have been piling into UK equities as the formerly unloved asset class rides the wave of Britain’s economic rebound from the lockdowns.

In second place, India’s top index rose 4.5%, while third place was taken by another UK index, the FTSE AIM 50, which climbed 4.2%. The FTSE 100 was outshone but still delivered a respectable 1.7% rise over the period.

What of the American giants that often dominate the performance charts? The Dow Jones rose 1.3%, the broad-based  S&P 500  put on 2.3% and the technology-focused Nasdaq climbed a healthy 2.5%.

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The worst performers included the beleaguered Hang Seng of Hong Kong, which dipped 1% in a month where nearly all major indices made gains.

Turning to individual stocks, and the best performing UK share of the month was betting group Flutter Entertainment (LSE:FLTR) which added a massive 17% to its value.

Rolls-Royce (LSE:RR.) put on a similarly punchy 16.8% in second place and JD Sports Fashion (LSE:JD.) added 14.1% to sit third. Talk of private equity takeover interest at Sainsbury's (LSE:SBRY) had the supermarket's shares at multi-year highs.

The worst laggard was mining giant Rio Tinto (LSE:RIO), which slumped 11.1% after it went ex-dividend and as investors bailed out on concerns about Chinese economic growth.

A rough September on the cards?

The FTSE All Share index saw an average return of –1.2% between 1970 and 2017, according to Harriman’s Stock Market Almanac. Around half of years saw a positive return in the month.

Since year 2000, performance in September has been even worse, with an average return of -1.6%.

September saw a 0.53% rise in 2018, a strong 2.75% climb in 2019, and a 1.8% fall in 2020.

During the month, the key focus in the markets will be economic data in the US such as a jobs update on the 7th, as well as the highly anticipated Federal Reserve meeting on the 21st and 22nd.

The Bank of England meeting on 23 September will receive a lot of attention on this side of the Atlantic.