December is meant to be a good time for UK equities. Be it a dearth of financial results, a lack of liquidity in the trading days around Christmas, or old-fashioned festive cheer, the so-called Santa Rally often finds the stock market in an optimistic mood, keen to end things with a party.
If that sounds like anecdotal rubbish, look at the FTSE All-Share’s history. Since 2005, the month has only finished down four times, thereby tying July for the most consistent 31-day window and April for the biggest average monthly gain (2.1 per cent).
This means that if the index finishes in the red this time, as current performance suggests it might, it would be at odds with recent history.