It is in recognition of this that Tilney is maintaining its neutral weighting toward the UK economy going into this election.
Hollands says: “There is already fair bit of anxiety priced into some of the more domestically focused companies.
“Those with high exposure to the consumer, like UK retailers, are already out of favour because they are more exposed to any deterioration or squeeze in discretionary spending.”
Trying to identify any clear winners and losers beyond thatis tricky.
“Looking at other industries, the further left the outcome of this election, the greater the threat to specific sectors of the UK stock market,” said Don Smith, chief investment officer at Brown Shipley.
Labour’s agenda of higher corporation tax and renationalisation and/or price caps for some industries has generated a cloud of uncertainty over the outlook for some sectors, principally utilities such as water and electricity.
Further, a perceived “weak government”, which he defines as either a Conservative minority, or worse, a hung parliament, would likely mean the Bank of England would continue to keep rates low, making financials less attractive and triggering a fall in gilt yields.
This outcome would be more supportive for defensive stocks like telecoms and consumer staples, Smith adds.
But last year’s events have taught investors one thing – be prepared for a shocking turn of events.
In this case, though, many like Kumar think it will be a case of “staying up all night without anything to show for yourself but tired eyes.”
