There are no guarantees, but statistics are supportive
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As the saying goes, ‘there’s no smoke without fire’, and this certainly applies to the Santa Rally phenomenon.
The table below – showcasing the yearly performances over the past 10 years and averages based on available data since 1992 – show the UK 100 has rallied in the eight weeks studied 18 times in the past quarter century.
Source: AlphaTerminal; 2017 Year To Date (YTD) calculated intraday 1 Nov 2017
The best UK 100 performance, a 10.8% rally, came in 1993 and is, to date, the only double-digit performance. However, a further seven rallies of over 5% have taken place in 1992, 1995, 1996, 1998, 1999, 2009 and 2016.
Conversely, the worst 8-week performance came in 2002, when the UK Index fell by 5%. This easily underperforms other negative years, with the UK Index falling by more than 2% on only two further occasions – 2000 and 2008.
But this phenomenon isn’t just limited to the UK 100 .
Stock market indices across the globe are prone to rally in the final 8 weeks of the year. On the next page, we analyse the performances of an array of global indices into the holiday period.
This research is produced by Accendo Markets Limited. Research produced and disseminated by Accendo Markets is classified as non-independent research, and is therefore a marketing communication. This investment research has not been prepared in accordance with legal requirements designed to promote its independence and it is not subject to the prohibition on dealing ahead of the dissemination of investment research. This research does not constitute a personal recommendation or offer to enter into a transaction or an investment, and is produced and distributed for information purposes only.
Accendo Markets considers opinions and information contained within the research to be valid when published, and gives no warranty as to the investments referred to in this material. The income from the investments referred to may go down as well as up, and investors may realise losses on investments. The past performance of a particular investment is not necessarily a guide to its future performance. Prepared by Michael van Dulken, Head of Research
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