“Should you look inside the FTSE, Brexit and what occurs to the pound are actually key for lots of the stocks,” Mr Prepare dinner added.
UK stocks have struggled for the reason that Brexit vote as traders keep away from a market wracked with uncertainty. The FTSE 250, the extra domestically centered mid-cap index, has additionally tumbled this yr, sinking 8pc.
Many market analysts count on the UK to shut the large gaps with different markets subsequent yr if a Brexit deal is signed off and the UK economic system bounces again. The blue-chip index is now again to ranges first reached within the late Nineties.
Sharon Bell, strategist at Goldman Sachs, mentioned the UK “looks cheap” in comparison with different stock markets and belongings.
“Some of this discount is down to sector exposure but, looking sector by sector, most UK sectors are on a substantial discount to both Europe and the US,” she mentioned. Ms Bell mentioned an finish to the Brexit saga would imply the “perception of ‘UK risk’ would likely fall”, including this is able to offset any adverse affect on the FTSE 100 from an increase within the pound.
US markets have been among the many strongest this yr, buoyed by Silicon Valley’s star performers benefiting from the pandemic.
The Nasdaq Composite, the tech-heavy index within the US, has soared greater than 40laptop in 2020, boosted by the likes of Zoom, Netflix and Tesla gaining floor. European markets have a smaller weighting of tech stocks, making up solely a tiny proportion of the UK market.