Will Hung Parliament Sting U.K. ETF?
Monday, May 3rd, 2010Michael Johnston submits:
Depending on the time, place, and specific circumstances, different issues generally come to the forefront during election season. In certain years, environmental campaigns receive particular attention. In others, dominant issues can include tax cuts and immigration reform get top billing. But in democratic elections around the world over the last two years, one issue has consistently trumped all others: the economy. This week’s election in the United Kingdom will be no different, with three main party leaders furiously traveling the country to promote their plans to stabilize a still-fragile recovery effort.
Some elections are foregone conclusions, with the ultimate outcome having little impact on the national economy (last week’s vote in Austria, which saw incumbent Heinz Fischer claim a landslide victory, is a good recent example). But when the races are close and the results uncertain, stock markets can go on a wild ride. Last year the election of the generally pro-business Indian National Congress sent India’s benchmark stock market higher by a whopping 25% in a single session. In September, an alliance between two parties signaling support of free markets in Germany sent the iShares MSCI Germany ETF (EWG) surging.
