World stocks recorded a moderate gain in June – the global MSCI All-Country World Index climbed 1.2% during the month but chalked up a stellar 15.8% quarterly gain — its best quarter in six years! Thus, the world index’s total gain for the first half of 2026 comes now to 14.3% (all in EUR). Main drivers continue to be the renewed enthusiasm around artificial intelligence (AI) investment and the easing geopolitical tensions in the Middle East. The US dollar strengthened, while gold and oil prices fell sharply. The United States remained at the center of the equity rally. Major American market indices advanced strongly during the quarter – the Nasdaq Composite surged more than 20%! (in USD) – supported by strong corporate earnings and continued expansion of AI-related capital spending. Additionally, a decline in oil prices, following a US-Iran ceasefire framework, helped improve investor sentiment. Overall, 85% of S&P500 companies exceeded earnings expectations, the highest proportion since 2021. European equities also posted strong gains during the quarter, with the STOXX Europe 600 achieving a double-digit rise. Lower energy prices and resilient economic activity supported investors mood, although Europe lagged the technology-driven US market. The booming demand for AI-related chips and hardware led to the exceptional performance of Asian equities. With the yen hitting its lowest rate in 40 years (¥162 to the dollar), Japan’s Nikkei225 had its best three months ever, rising by 37%. South Korea's index KOSPI surged nearly 70%, while Taiwan’s market – almost 50%. Emerging markets overall recorded their best quarterly performance since 2009, driven by the so-far insatiable AI demand. South Korea’s exports grew 71% in June year-on-year, the biggest such jump in 50 years. Semiconductor exports in particular were up by 200%, boosted by demand for memory chips. Even so, the share prices of several technology leaders suffered in June, with Apple, Meta and Nvidia all down. Microsoft’s stock fell by 17%, which was its worst month in 25 years. China shares too continued their suffering, dropping by more than 7% overall in June, Favorable non-manufacturing PMI reading suggested strong export demand, but domestic demand, by contrast, declined. Bond markets (and commodity ones) were largely driven by changing energy price expectations. Oil prices fell sharply from their spring highs as geopolitical tensions eased, while gold suffered its worst quarterly decline in more than a decade. Lower energy prices improved the inflation outlook, but underlying price pressures remain persistent, limiting expectations for substantial central bank rate cuts. The European Central Bank (ECB) even chose to raise interest rates by 0.25% in June, while the Federal Reserve (Fed) indeed kept rates unchanged, reinforcing its commitment to price stability. Bond yields initially rose to multi-year highs (with the escalation of fears) but later reversed on the prospect of US-Iran agreement. Fixed income in general delivered positive returns despite the elevated volatility during the quarter. On sovereign debt markets, Japan and the US underperformed overall, while within the Eurozone, Germany lagged non-core and peripheral markets, with Greece a notably strong performer for the quarter. Corporate bonds performed well, benefiting from tightening credit spreads and continued investor demand for attractive yields. European high-yield bonds were a standout performer returning 3.7% in the quarter. Looking ahead, elevated valuations, concentrated market leadership, and uncertainty around future central bank policy could result in greater market volatility during the second half of the year.
U.S. equities delivered an outstanding second quarter, with the S&P500 rising 15.2%, the NASDAQ Composite gaining more than 21% and the Dow Industrial advancing 13% (all in USD) — the strongest quarterly performance for the major indices since 2020. Markets were supported by resilient economic growth, strong corporate earnings and the continued enthusiasm for artificial intelligence (AI). The AI investment cycle remained the dominant market theme. Hyperscalers raised their 2026 capital expenditure plans to an impressive USD 700 billion, supporting strong performance across semiconductors, cloud infrastructure and data-centre-related businesses. U.S. equities are enjoying an extraordinary earnings run. The first-quarter earnings season was particularly strong, with 85% of S&P500 companies beating expectations, while second-quarter earnings are expected to grow by more than 23%. That would mark a seventh-consecutive quarter of double-digit growth (and the second consecutive quarter of earnings growth exceeding 20%!). A major market event was the USD75 billion SpaceX IPO, the largest listing in human history so far. Together with several other large offerings and significant debt issuance by hyperscalers, the IPO temporarily weighed on liquidity and contributed to profit-taking in large technology stocks during June. As a result, the previously dominant "Magnificent Seven" companies lost momentum, collectively declining around 10% during the month. Microsoft fell 17% — its worst monthly performance since December 2000 — while Apple, Meta and Nvidia also retreated. At the same time, market leadership broadened, with Financials, Healthcare, Utilities and smaller companies outperforming, a constructive sign for the sustainability of the rally. Investor sentiment improved further as Middle East tensions eased and oil prices retreated from their April peak near USD120 per barrel, reducing inflation concerns. Combined with stronger payroll growth, rising consumer confidence and a relatively stable policy backdrop under new Federal Reserve Chair Kevin Warsh, this helped support risk assets despite elevated valuations. US Treasury yields were broadly unchanged over the quarter, but notable moves beneath the surface led to a flatter yield curve as short-term yields rose while longer-term yields edged lower. The labour market remained remarkably resilient, with stronger-than-expected job growth and unemployment at 4.3%, supporting expectations that interest rates will stay restrictive (higher) for longer. Inflation increased to 4.2% year-over-year in May, largely driven by a sharp 7.0% rise in gasoline prices rather than broad-based price pressures. Meanwhile, wage growth remained subdued at 3.5% — one of the weakest annual increases in five years — suggesting limited evidence of a wage-price spiral. The Fed kept rates unchanged at 3.50%–3.75% and maintained a hawkish tone. Despite this, long-term yields declined modestly, with the 30-year Treasury ending the quarter at 4.90%, reflecting investor confidence that inflation pressures should gradually ease in the coming months.
European equities delivered a strong month and quarter, with the pan-European index STOXX600 reaching a new all-time high. Investor sentiment was supported by easing tensions in the Gulf conflict, improving economic conditions, and expectations that the ECB would take a more tempered approach to future rate hikes. Lower oil prices helped ease inflation pressures across key eurozone economies, while consumer confidence rebounded from April lows. Continental Europe was the clear regional outperformer. The MSCI Europe ex-UK index gained 14% during the quarter (in EUR), driven by strong advances in Technology and Financial stocks. Technology companies benefited from continued enthusiasm around artificial intelligence and solid corporate earnings, while financials remained supported by relatively high interest rates. Improving manufacturing data and resilient economic sentiment also reinforced investor confidence. Energy was the notable weak spot. As oil prices fell back to levels seen before the Iran–US conflict, energy stocks underperformed across the region. This was particularly evident in Norway, whose market declined more than 13%, making it one of the weakest performers in Europe and highlighting the impact of lower commodity prices on energy-dependent markets. UK equities posted a positive but more modest 3% quarterly gain (FTSE100 in GBP), lagging continental Europe due to their heavier exposure to energy and other commodity-related sectors. Political developments attracted attention as Keir Starmer stepped down as Labour leader, paving the way for Andrew Burnham to become the UK's fifth prime minister in less than a decade. Despite the unusual political backdrop, markets remained largely focused on economic fundamentals. Inflation stayed above target, while the Bank of England kept interest rates unchanged. European government bonds delivered solid gains during the month and across the second quarter as investors shifted their focus from inflation risks toward weaker growth prospects. Despite the ECB raising rates by 25 basis points to 2.25%, euro-area bonds outperformed global markets, supported by moderating inflation and expectations that further tightening will be limited. Performance was strongest in peripheral markets, with Italian government bonds returning 2.5% and Spanish bonds 1.9%, ahead of German Bunds at 1.5%, reflecting improving investor risk appetite as geopolitical concerns eased. UK gilts were among the standout performers globally, gaining 2.1% during the quarter and more than recovering previous-quarter losses. Weakening economic activity, softer housing data and a decline in core inflation from 3.1% to 2.6% reduced expectations of further Bank of England tightening. Markets also reacted calmly to Prime Minister Keir Starmer's resignation, with an orderly leadership transition helping limit political uncertainty.
June was a relatively ordinary month for the shares of the Bulgarian Stock Exchange (BSE) as a whole. The flagship index SOFIX rose by just over 1%. All other indices on the domestic exchange, except for the real estate one (BG REIT), also ended up for the month. There continues to be an improvement in activity indicators after the adoption of the euro –  an increase in the number of transactions compared to a year or a month earlier, and turnover has also increased significantly (almost double). In June, the next edition of the "Equity Day" initiative was held, organized by the BSE and the Central Depository.  A total of 26 investment intermediaries and banks took part in it, providing an opportunity for commission-free trading for retail investors. In the "Equity Day" a turnover of over EUR 1.5 mln. and the number of executed deals approached 1000. Towards the end of the month, the big news came that the international company MSCI, which administers many global financial indices, is raising the status of the Bulgarian capital market to Frontier Market. The recognition comes as a result of the consistent efforts of institutions and market participants to improve access, liquidity and investment environment in the country. For the month, among the blue chips on the BSE, the best performer for June was the holding "Chimimport" AD, with over 13% return, and the worst – the tech company "Wiser Technology" AD, with more than 13% decrease.
Source: Bloomberg, BSE