United Kingdom Stocks, ETFs To Watch After Keir Starmer, Labour Party Win
Portfolio Pulse from Chris Katje
Keir Starmer of the Labour Party is set to become the new UK Prime Minister, ending 14 years of Conservative control. The iShares MSCI United Kingdom ETF (EWU) and Franklin FTSE United Kingdom ETF (FLGB) saw minimal gains, while the iShares MSCI United Kingdom Small Cap ETF (EWUS) could benefit from Labour's policies. Analysts see potential growth in the homebuilding and mining sectors.
July 05, 2024 | 4:53 pm
News sentiment analysis
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NEGATIVE IMPACT
HSBC Holdings (HSBC) traded lower despite the Labour Party win. The financial sector's future under Labour policies remains uncertain.
HSBC's decline suggests investor uncertainty about the financial sector's future under Labour's policies.
CONFIDENCE 80
IMPORTANCE 50
RELEVANCE 60
POSITIVE IMPACT
The iShares MSCI United Kingdom ETF (EWU) saw a 0.5% increase on Friday. The ETF has significant exposure to financials, consumer staples, and energy sectors.
The ETF's slight gain indicates that the market had already priced in the election results. However, the ETF's exposure to various sectors could benefit from Labour's policies.
CONFIDENCE 90
IMPORTANCE 70
RELEVANCE 80
POSITIVE IMPACT
The iShares MSCI United Kingdom Small Cap ETF (EWUS) could benefit from Labour's policies, especially in the real estate sector, which is its fourth-largest weighting.
EWUS's significant exposure to the real estate sector positions it well to benefit from Labour's expected policy changes and potential rate cuts.
CONFIDENCE 95
IMPORTANCE 80
RELEVANCE 90
POSITIVE IMPACT
The Franklin FTSE United Kingdom ETF (FLGB) offers exposure to the UK market with similar top holdings as EWU. It has significant weightings in financials, consumer staples, and energy sectors.
FLGB's similar composition to EWU suggests it will also benefit from Labour's policies, particularly in financials and consumer staples.
CONFIDENCE 85
IMPORTANCE 60
RELEVANCE 70
POSITIVE IMPACT
Rio Tinto PLC (RIO) traded lower despite the Labour Party win. The mining sector could benefit from Labour's focus on electrification of energy supply.
Despite the short-term decline, Rio Tinto could benefit from Labour's focus on electrification, which may drive demand for mining resources.
CONFIDENCE 85
IMPORTANCE 70
RELEVANCE 60