videopokerhowtoplay| History reveals the profound impact of the British election on the stock market and market fluctuations appear?

Zhitong Financial APP learned thatVideopokerhowtoplayAs the British general election approaches, the expectation that the centre-left Labour Party is expected to return to power in 14 years' time has caused positive waves in the stock market. Opinion polls show that Labour's victory will end the rule of the right-wing Conservative Party led by British Prime Minister Richthunak, although it may need to form an alliance with other small parties to form a government.

The latest analysis by Citibank reveals the performance trend of the British stock market in the six months after the election. Data since 1979 show that stock markets are usually "relatively flat or falling", excluding the impact of extreme financial conditions such as the bursting of the dotcom bubble and the financial crisis. In particular, when Labour won, the MSCI index of UK large and medium-sized stocks rose by an average of about 6 per cent, while it fell by about 5 per cent after the Conservative victory.

The FTSE 250 index, which focuses more on the domestic market, showed stronger market performance during the Labour administration than the FTSE 100 index. In addition, defensive and financial stocks tend to perform better after elections, while energy stocks consistently perform well.

Still, John Higgins, chief market economist at Capital Macro, warns that blaming the stock market volatility entirely on the ruling party is one-sided. He pointed out that the historical decline of the British stock market during the Labour government has often been linked to broader economic crises such as the Great Depression, post-war reconstruction, oil market shocks, Internet crashes and financial crises.

Higgins also mentioned that the relative performance of the British stock market has been disappointing since the Conservative Party came to power in 2010. He believes that whatever the history, Labour's return to power is unlikely to have a significant impact on investors.

On fiscal policy, Labour leaders, especially shadow finance minister Rachel Reeves and party leader Kill Stamer, have stressed the importance they attach to fiscal discipline and are committed to reducing the proportion of national debt to gross domestic product. Reeves, a former banker, has been actively enlisting the support of business leaders and financial institutions by meeting executives and attending events such as the World Economic Forum in Davos.

CS Venkatakrishnan, chief executive of Barclays, said in January that political risk in the UK had fallen to an all-time low and that differences in economic policies between parties were minimal.

During the campaign, Labour accused the Conservatives of creating a so-called "small budget crisis" during the brief term of Sunak's predecessor, Liz Truss, which led to a surge in public debt and damaged Britain's economic credibility. Sunak responded that inflation has returned to normal, the economy is growing and wages are rising sustainably.

With regard to the outlook for sterling, analysts predict that the future of sterling and UK government bonds will be more related to the outlook for interest rates because there is little difference between the positions of the two parties on fiscal issues. Joe Taki, head of foreign exchange analysis at Argentex Group, pointed out that the reaction of the sterling market will be relatively mild when the election results are clear, and the pound is expected to rise slightly in the coming weeks, while there is little reaction to the election results themselves.

Overall, while the election results may lead to some market volatility, analysts generally believe that the long-term outlook for the UK stock market and currency will be more affected by macroeconomic factors and interest rate policies than by single-party policy guidance.

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