Domestic-focused shares like homebuilders, banks and retailers all rallied after Liz Truss said she would quit as prime minister on Thursday, but gains were quickly trimmed. The FTSE 250 index, which makes about half its sales in Britain, ended the session up 0.8%.
No matter who enters Downing Street next -- be it frontrunner Rishi Sunak or even Truss's predecessor Boris Johnson -- British companies are facing an economy being pushed into recession by surging inflation and interest rates. That's unlikely to change any time soon.
"I wouldn't expect UK equities to have a significant bounce," said Peter Chatwell, head of global macro strategies trading at Mizuho International, "We are on the wrong side of a deep and painful recession."