The stockmarket in June

A quick glance at the accompanying chart (showing the monthly returns of the FTSE All-Share index in June since 1984) illustrates the fact that this is not a good month for shares.

Historically, the May-June period has been the weakest two-month period in the year for the UK equity market.

Since 2007, the market has only risen in June in one year; the average June return over those nine years is -2.8%.

And in June last year the index fell 6%. This dismal record makes June the stand-out worst month for shares in recent years.

Oil and biotech buck the trend

Over the longer term the record is a little better; since 1970 the average return in June has been -1.1%, but also over this period it is the only month in the year with more negative than positive returns. So not much cheer to be expected for shares this month.

In an average June the market starts strongly, hitting its month high on the second or third trading day, but prices then drift down steadily for the rest of the month.

However, the market ends the month on a positive note - the last trading day is the second strongest of the year.

Despite the overall market weakness in June, three sectors have gone against the trend and seen consistent strength in the month: beverages, oil & gas producers and pharmaceuticals & biotechnology.

But while many sectors, unsurprisingly, experience weakness in June, none is consistently weak over many years.

This article was originally published by our sister magazineMoney Observer here.

This article is for information and discussion purposes only and does not form a recommendation to invest or otherwise. The value of an investment may fall. The investments referred to in this article may not be suitable for all investors, and if in doubt, an investor should seek advice from a qualified investment adviser.