“Since the launch of the FTSE All-Share in 1962, the average gain in the index under a Labour Government is 26.8% against 59.9% under a Conservative-led administration,” says Russ Mould, AJ Bell Investment Director. “The market also has a slight preference for an election victory for the incumbent Government. The average gain in the FTSE All-Share over a full term stretches to 46.8% when the ruling party retains power as against 43.1% when Downing Street welcomes a new Prime Minister.”
Less expected is the market's apparent indifference regarding the size of a Government's majority, which may help ease fears regarding a second successive Coalition. AJ Bell's research shows there is no correlation between the advantage a party enjoys in Parliament relative to how well the stock market performs during its tenure.
The market did well, in nominal (before inflation) terms under the Callaghan, Major and first Thatcher, and also the Cameron, administrations, despite their relatively small majorities and less so under the second Blair and the Thatcher/Major and Blair/Brown periods.
Notes for Editors
- A spreadsheet containing raw data and charts on all of the topics above is available on request.