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UK stockmarket expected to rebound by end of week

UK stockmarket expected to rebound by end of week

Losses seen in the UK stockmarket over recent weeks will start to reverse towards the end of the month, advisers believe.

The majority of advisers believe the UK stockmarket will start to rebound on the morning of 24 June and recover some of the losses made during a time of political and economic uncertainty in the UK.

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According to the latest poll from FTAdviser Advantage, 73 per cent of advisers believe the UK stockmarket will ‘rise immediately’ on opening, if the status quo is maintained.

However, some 15 per cent believe there will be no significant change, as the effects of the EU referendum have already been priced in.

Just 12 per cent of advisers polled believed there might be further drops to come for the FTSE 100.

Over the four days to close of play on 14 June, the UK blue-chip index saw more than £100bn wiped off its value in four days, dipping below the 6000 mark for the first time since late February.

By 16 June, the index level had continued its drop, falling to 5,932.60 as at close of play.

Andrew Sentance, former member of Bank of England’s monetary policy committee and now business economist with PwC, said the stock market falls were a “mild foretaste of things to come” for the UK in the event of further politico-economic uncertainty.

Marcus Brookes, head of multi-manager for Schroders, offered a more gloomy note: “Worryingly, it is plausible this observed weakness is a signal of a more serious UK economic slowdown emerging.”

However, Chris Beauchamp, market analyst for IG, said this might not be a doom-and-gloom scenario, and expects areas of strength to push the FTSE higher in the longer-term.

He said: “It has not been surprising to see the FTSE 100 fall back below 6000, surrendering much of the ground gained since the February low around 5500. However, it is arguably the case the index could offer good upside over the longer-term.”

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