'I'm a money expert - here are the stocks to watch after Labour's election win'

For the first time in 14 years, the Conservatives have been outvoted. After leading the polls for weeks, Labour has come out of the UK general election victorious.

The results have sparked a lot of interest and speculation among investors. The Labour win is one of the biggest governmental changes that our country has seen since the Tories won in 2010.

But, why does this matter to investors? Because large political events can lead to volatility in the markets.

What will happen in the markets now that Labour has won? Which stocks should you keep an eye on? Let’s dive in and see what the potential impacts could be on various sectors and specific stocks.

1. Rail Stocks

Labour has been clear about their plans to nationalise all rail services, and this could spell trouble for private rail companies.

Companies like Trainline, Stagecoach, and FirstGroup might face significant challenges. If the nationalisation plans go ahead, we could see these stocks take a hit as their revenue streams are taken over by the government.

Investors in these companies should stay alert and consider the potential impacts on their portfolios.

2. The FTSE100

The FTSE100 is the index most people look to when gauging the health of the UK stock market. So, how might it react to a Labour win?

How Have Past Elections Affected the FTSE100?

Historically, the FTSE100 has shown mixed reactions to general elections. Sometimes there’s a dip due to uncertainty, but often it rebounds once the dust settles.

Sectors like utilities and transport might see volatility, but overall, the market tends to stabilise once investors adjust to the new policies.

Labour won by a pretty large majority, which is typically good for the FTSE100. A majority win suggests political certainty, which is great for the stock market!

Nevertheless, if you currently hold FTSE100 stocks, prepare for some volatility in weeks to come.

3. Healthcare Stocks

Healthcare is always a hot topic during elections, and Labour’s policies could have significant impacts here too.

The Impact of Labour Policies on the Healthcare Sector Labour has promised more funding for the NHS and a crackdown on private healthcare profiteering. This could mean bad news for private healthcare providers and pharmaceutical companies reliant on NHS contracts.

Companies like Bupa, Spire Healthcare, and even some big pharma names could see their stocks fluctuate based on these policy changes.

As well as cracking down on privatisation, Labour has pledged to double the number of CT and MRI scanners in the NHS, build 40 new hospitals by 2030, and has pledged to improve waiting times.

To achieve the goals, the party would need to invest a lot of cash into companies that develop medical technology and products.

4. Great British Energy

Keir Starmer has plans to create a new publicly-owned energy company, Great British Energy. This is aimed at ensuring Britain benefits from the transition to renewables.

If this plan goes ahead, it could mean increased competition for private energy companies. However, it might also present new investment opportunities in the renewable sector.

Companies involved in green energy could see a boost, so it’s worth watching stocks in this space for any positive impacts from government investment and policy support.

5. UK AIM Stocks

The AIM market is known for its smaller, growth-oriented companies, which can be more sensitive to political changes.

How Has the AIM Market Performed After Previous UK General Elections?

Historically, the AIM market has experienced volatility around general elections, often more so than the FTSE100.

Smaller companies can be more susceptible to policy changes and market sentiment shifts. Now that Labour has won, look for potential impacts on sectors that are heavily regulated or rely on government contracts.

If you currently hold any of these in your portfolio, make sure to diversify with shares that are more robust against policy changes.

What Might The Labour Win Mean for the Stock Market? (A Look at Past Performance)

Looking at past performances, a Labour win can bring a mix of volatility and opportunity. Markets like certainty so a majority win is the best case scenario. However, investors should still expect some volatility in any case.

Once policies are clarified and investors understand the new landscape, the market often stabilises. For investors, the focus should be on understanding which sectors and stocks are most likely to be impacted by Labour’s policies and positioning themselves accordingly.

As always, the key is to diversify! Luckily, we have a brilliant guide on MoneyMagpie all about diversifying your portfolio.

Don’t put all of your eggs in one basket. Instead, try spreading your investments across multiple sectors to reduce the impact of a big loss on your wealth.

Jasmine Birtles is the founder of MoneyMagpie.com. Sign up to their free, fortnightly investing newsletter here.