Shares and sterling are rallying as the financial markets react to the Conservative Party’s election triumph
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- FTSE 250 hits all-time high
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- The mood on the trading floor
The economic and financial reaction to Johnson’s win could mirror Donald Trump’s success three years ago, suggests Tristan Hanson, multi-asset fund manager at M&G Investments:
A surge in UK business confidence may well be the outcome, as occurred in America following President Trump’s surprise election victory. Combined with looser fiscal policy, the UK economy may enjoy a period of much better growth than experienced in recent years.
The election result is therefore likely to be positive for sterling and UK equities, while UK gilts look very unattractive by comparison and vulnerable to any upward reassessment of the long-run outlook for UK interest rates. Certain European equities, notably banks, are also likely to benefit, as UK political uncertainty has weighed on performance in recent times.
The FTSE 100 is continuing to climb, and is now up 132 points or 1.8% at 7,405. That’s a two-week high.
The top four shares are all house-builders, with Taylor Wimpey, Berkeley Group, Barratt Development and Persimmon gaining at least 11%.
Retailers and Housebuilders that generate revenues based on UK demand and have non-sterling import costs are seeing a surge in early trading as the outlook for both their revenues and costs improve