Financials and industrials stand out

The UK equity market only managed to make a small positive return in June. Despite

the overall outcome being subdued it masked some wide disparities as one sector,

Information Technology, recorded a gain of nearly double digits while Health Care fell

substantially. The rest of the market was less volatile with a third of sectors ending

lower.

External factors were not significant. Sterling gained a little against both the dollar and

the euro while oil prices edged up a little.

Looking back over the first six months of the year UK equities made a meaningful

advance of very high single digits. Two sectors standout, Financials and Industrials,

each with gains of around one fifth. Two other sectors, Information Technology and

Utilities made double digit gains. Materials was the only sector to record a negative

return.

The appreciation in value of UK stocks is especially surprising given the biggest fall in

the dollar over the first half of the year in many decades.

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