UK stocks will continue to outperform their European counterparts even if Britain chooses to leave the European Union, analysts at JP Morgan and Deutsche Bank said on Monday (13 June). The increasing uncertainty surrounding the outcome of the EU referendum on 23 June has triggered widespread volatility in the financial markets.

Despite the pound tumbling to an eight-week low earlier on Monday, economists at Deutsche Bank believe UK equities will fare better than the European market in the event of a Brexit, as a declining pound could provide a boost to London-listed stocks.

"In the case of a 'Leave' vote in the UK referendum [...] we expect UK equities to outperform the European market, given the likely British pound depreciation in such a scenario, as well as the market's defensive sector structure," they said.

The view was echoed by their counterparts at JP Morgan, who indicated the impact of a Brexit would be harsher on European companies than it would be on British firms.

"Brexit remains a clear concern, but the pound is a natural hedge for UK stocks, with 72% of sales derived from abroad," they said.

"We would hedge out the foreign exchange risk, but believe that UK equities will hold out relatively better than continental ones in the event of UK leaving."

Meanwhile, analysts at Hargreaves Lansdown said that while leaving the EU would most likely result in a downturn in the market, the long-term consequences on the stock market might not be as negative as expected.

Lee Gardhouse, chief investment officer at the London-based firm, said: "We think it's impossible to know the long-term economic implications of a British exit from the European Union. While an out vote would most likely lead to a market fall, we cannot just assume this will be bad for the long term prospects of the stock market."

Gardhouse added that while economists might correctly call the impact on equities from the outcome of the referendum, the market reaction remained a lot trickier to predict.

"Taking a market view on big economic events will add value if you can consistently get it right, but making such calls is notoriously difficult," he said.

"It could be that you predict the change correctly, yet find the market reacts in a way you would not have expected."