UK equities lacklustre in election month

The UK equity market trod water in June with little significant movement in any sector. The

largest change was a small increase in Energy but only measurable in basis points not whole

percentages. Five other sectors made gains while the remaining six all recorded small

declines.

Although the UK general election was called in June and the result was not known during

the month it is doubtful whether it had a meaningful effect on capital markets. The lack of

movement is more probably a consequence of the reduction of news flow as the results

season came to an end and preparations began for the northern hemisphere holiday season.

The end of June also marks the completion of the first half of the year and UK equities

delivered healthy single-digit gains over the six months. Only three sectors recorded declines

while four made double digit gains led by Financials and Health Care. Real Estate and

Consumer Discretionary were two of the fallers as might be expected from the continuing

squeeze on disposable income and concerns about interest rates on property prices allied

with changes to working practices.

Dividend forecasts for next year edged up a little over the month led by resource

companies.

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