The FTSE 100 (^FTSE2) dipped into the red at the close, dropping by 0.45%, while European stocks were mixed on Friday as voters in the UK general election delivered a devastating verdict on 14 years of Conservative rule. Labour won 41 seats to the incumbent Tory government’s 121, with prime minister Rishi Sunak conceding defeat.
The domestically-focused FTSE 250 (^FTMC) surged ahead on the back of the news in London, climbing as much as 1.8% to its highest level since April 2022. This is because it has more companies which do business in the UK compared to the FTSE 100.
Housebuilders were the main drivers of the gains, rising by 2.5% amid hopes that Labour will amend planning laws to kick start development.
Meanwhile, US stocks held near all-time highs on Friday as investors weighed the June jobs report, which will play into Federal Reserve rate cut calculations. The US economy added 206,000 jobs in June, more than the 190,000 expected on Wall Street.
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London’s benchmark index ended the session low dropping by 0.45% .
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Germany’s DAX (^GDAXI) rose 0.14% while CAC (^FCHI) in Paris dipped 0.26%.
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The pan-European STOXX 600 (^STOXX) was down 0.2%.
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Wall Street held near record highs on Friday after the Independence Day holiday. The S&P 500 (^GSPC) slipped just below the flatline, the Dow Jones Industrial Average (^DJI) fell 0.2%, while the tech-heavy Nasdaq Composite (^IXIC) gained 0.3%.
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The pound was 0.3% up against the US dollar (GBPUSD=X) at 1.2780.
Dan Coatsworth, investment analyst at AJ Bell, said: “There is always a sense of nervousness ahead of markets opening the day after a general election, but we only get extreme volatility when investors are caught by surprise. This time round, there was nothing to get heads spinning as the result was widely expected. Instead, investors appeared to welcome the news with open arms.
“Political uncertainty is over and this removes one of the key risks around UK equities, so it’s feasible that more domestic and foreign investors are now looking for opportunities on the market. This suggests today’s reaction might not be a one-day sensation.”
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Thus the week ends. Sir Kier Starmer is now the UK’s new prime minister and has lost no time in making his Cabinet appointments: Rachel Reeves, the first ever female chancellor of the exchequer, and Angela Rayner deputy prime minister.
Reeves told the BBC there is not a huge amount of money left and that she will lean on the private sector calling it the ‘lifeblood of a successful economy’.
FTSE 100 had jumped in the morning as results confirmed Labour’s landslide win but dipped in red ending the day 0.45% lower than previous close. The London market had already priced in a Labour win from weeks before so the needle didn’t move dramatically in either direction, spiking green and red in modest measures.
The US meanwhile is looking to close out the week in green as tech rally sustains record highs. You can read our US live blog here for all the latest updates.
Closer home the focus next week will turn to chancellor Reeves as she takes reins of the Treasury amid mounting speculation over the likelyhood of Bank of England cutting interest rate from 5.25% to 5% in August. That said much could change between now and when the monetary policy committee meets next month.
For now though it’s all change at Westminster as Starmer premiership begins.
That’s it from us. Have a great weekend!
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US stocks hold record highs after jobs data
US stocks held near all-time highs on Friday as investors weighed the June jobs report, which will play into Federal Reserve rate cut calculations.
The S&P 500 (^GSPC) slipped just below the flatline, on heels of the report, after notching a record close in a shortened session on Wednesday. The Dow Jones Industrial Average (^DJI) fell 0.2%, while the tech-heavy Nasdaq Composite (^IXIC) gained 0.3%. All three gauges were shuttered on Thursday for the Fourth of July holiday.
The US economy added 206,000 jobs in June, more than the 190,000 expected on Wall Street. But the unemployment rate unexpectedly rose slightly to 4.1%, its highest level since November 2021, in another signal the jobs market continues to cool.
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Read More: FTSE 100 dips, Europe mixed and Wall Street holds near record high as Labour wins UK
2024-07-05 20:04:00