Recent heavy falls might make this seem unlikely. But investors should gear up for a possible stock market rally in April. Have a pile of cash sitting idle in a savings account? You might want to consider putting it in shares. I know I am.
No, I haven’t gone mad. Let me explain why UK share prices might be about to explode.
Good omens
I’ve done some digging, and found some staggering data on monthly market performance. According to Seasonax, “the FTSE 100 has one of the strongest April patterns among global indices“.
The trading software provider explains that
with fresh capital allocations for the new tax year as well as portfolio rebalancing, and institutional inflows often converging at the start of a new month, the UK benchmark frequently benefits from a strong seasonal boost.
Seasonax also notes that that “UK investors often rush to maximise their annual allowances for ISAs and pensions“, leading to a surge in buying activity in the first days of April.
It’s calculated how the FTSE 100 has performed each April between 2000 and 2024. The result is an average month-on-month rise of 1.9%, and a monthly increase 72% of the time.
A FTSE 100 bargain
As I say, I’ve built up some money myself and am looking for stocks to buy this April. Recent market volatility has stimulated my appetite even more, by providing a fresh crop of bargain shares.
National Grid (LSE:NG.) is one I’m considering right now. It’s down 12% over the last month, showing how even rock-solid utilities stocks can drop when markets panic.
National Grid’s expensive operations mean it carries a lot of debt. And if interest rates rise to cap soaring inflation, the cost of servicing this could soar when its existing bonds mature. Net debt was £41.8bn as of September.
Still, I believe the market’s reaction to this is overblown. And with the firm trading on a forward price-to-earnings (P/E) of just 13 times, I’m giving it serious consideration.
The power grid operator could prove a perfect pick in uncertain times like this. Electricity is an essential commodity, meaning National Grid’s services are required across the economic cycle. This should lead to resilient cash flows and earnings, and more robust dividends for investors to enjoy.
Speaking of which, the FTSE 100 share’s forward dividend yield is now a juicy 4.2%.
What should you do now?
Before you rush off looking for stocks to buy, I need to highlight a few things. No-one can predict with 100% confidence how financial markets will perform in the near term. On top of this, past performance isn’t always a reliable guide to future returns.
Finally, investing in April 2026 will likely be more challenging than usual. As we’ve seen already, fears over soaring inflation and cooling growth leave share prices vulnerable to volatility.
That said, it’s still very possible that global stock markets could take off this month. And given that share prices broadly rise over time, I believe now’s a great time to consider investing.
