The U.K. is heading for a General Election on July 4, and history may indicate a neutral to positive stock market reaction if the Labour Party ousts the Conservatives, analysts said.
Labour leader Tony Blair arriving in Downing Street after his election victory with crowds waving flags in the background, 2nd May 1997.the center-left Labour Party could return to power after 14 years — and analysts say stock markets would react positively to that outcome. The MSCI UK index of large- to mid-cap stocks has been up by circa 6% six months after Labour victories and down circa 5% following Conservative wins, according to Citi.Defensive stocks and financials tend to perform better post-elections, with energy performing well on both sides, the bank also found.
Higgins also observed that the relative performance of U.K. stocks has "generally been underwhelming since 2010," when the Conservatives took office.
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