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London open: Stocks surge as Trump declares victory
London stocks rallied in early trade on Wednesday as Donald Trump closed in on the US presidency.
At 0835 GMT, the FTSE 100 was up 1.3% at 8,278.79.
Kathleen Brooks, research director at XTB, said: “Trump has declared victory on stage in Florida, it’s a little premature, but he is only 4 electoral college votes away from winning, and there is no way for Harris to catch him at this stage.
“In the end, this was not a tight race, and it was wrapped up quickly. This has helped to boost risk sentiment on Wednesday, as it reduces the chance of civic unrest. The national opinion polls got this election very wrong. Even the market-based prediction polls had narrowed sharply in recent days, although they had consistently predicted a win for Trump.
“The results of this election are clear: it’s a red wave, he has received a massive mandate for his agenda, and Trump and the Republicans could get a clean sweep after winning the Senate and the White House. Trump won the popular vote and in the last 4 years it looks like more Americans have turned Republican.
“This result also suggests that the market was right all along. In the aftermath of the result, the market has put the Trump trade back on. However, there is some ‘buying the rumour, and selling the fact’ going on. Bitcoin has backed away from the record high $75,000 level, the dollar has stabilized after sharp gains overnight and US Treasury yields are also down a touch.”
Brooks pointed out that US stocks are set to surge at the open, with S&P 500 futures suggesting a jump above 5,900, which would be the 48th record high of the year so far.
“US stocks surged in the aftermath of Trump’s 2016 victory and his promise to lower taxes and cut red tape is supportive of the next leg higher in US stocks,” she said.
In equity markets, equipment rental firm Ashtead – which has significant exposure to the US, trading there as Sunbelt Rentals – surged to the top of the FTSE 100.
Building materials group CRH was also sharply higher.
Lancashire Holdings gained as it said gross premiums written rose 9% in the first nine months of the year to $1.7bn and announced a special dividend of 75 cents per share.
Prudential advanced as it posted an 11% increase in third-quarter new business profit to $2.3bn.
Burberry was boosted by an upgrade to ‘outperform’ from ‘sector perform’ at RBC Capital Markets.
Marks & Spencer advanced as it reported better-than-expected first-half profits as it said the food and clothing segments have now delivered market share growth for four consecutive years.
In the 26 weeks to 28 September, profit before tax and adjusting items rose 17.2% to £407.8m, coming in ahead of consensus expectations of £361m. Pre-tax profit was up 20.4% to £391.9m.
Pub chain JD Wetherpoon was higher after saying it was “confident of a reasonable outcome for the year” as it reported record sales but highlighted rising costs.
TBC Bank was also up after results, while AO World rose as the online electricals retailer said it has been given approval by the Financial Conduct Authority for its takeover of MusicMagpie.
On the downside, housebuilder Persimmon fell despite saying it was on track to hit full-year targets for housing completions this year after an in-line third-quarter performance, with demand helped by improvements in customer sentiment as interest rates begin to reduce and affordability improves.
Top 10 FTSE 100 Risers
| Sponsored by Plus500 |
|
| # | Name | Change Pct | Change | Cur Price | |
|---|---|---|---|---|---|
| 1 |  |
Ashtead Group Plc | +6.90% | +412.00 | 6,380.00 |
| 2 |  |
Crh Plc | +6.06% | +448.00 | 7,844.00 |
| 3 |  |
Intercontinental Hotels Group Plc | +5.24% | +448.00 | 9,002.00 |
| 4 |  |
Barclays Plc | +5.06% | +12.40 | 257.30 |
| 5 |  |
Marks And Spencer Group Plc | +4.80% | +18.40 | 401.90 |
| 6 |  |
Flutter Entertainment Plc | +4.69% | +820.00 | 18,305.00 |
| 7 |  |
Prudential Plc | +4.51% | +29.20 | 677.20 |
| 8 |  |
Ferguson Enterprises Inc. | +4.34% | +670.00 | 16,100.00 |
| 9 |  |
Intermediate Capital Group Plc | +4.26% | +90.00 | 2,202.00 |
| 10 |  |
Informa Plc | +4.08% | +33.20 | 846.20 |
Top 10 FTSE 100 Fallers
| Sponsored by Plus500 |
|
| # | Name | Change Pct | Change | Cur Price | |
|---|---|---|---|---|---|
| 1 |  |
Aib Group Plc | -1.88% | -8.50 | 444.50 |
| 2 |  |
Banco Santander S.a. | -1.43% | -5.50 | 380.00 |
| 3 |  |
Smith & Nephew Plc | -1.14% | -11.00 | 955.20 |
| 4 |  |
Bt Group Plc | -1.12% | -1.65 | 145.75 |
| 5 |  |
Woodside Energy Group Ltd | -0.67% | -8.00 | 1,192.00 |
| 6 |  |
Severn Trent Plc | -0.60% | -16.00 | 2,632.00 |
| 7 |  |
London Stock Exchange Group Plc | -0.32% | -35.00 | 10,845.00 |
| 8 |  |
Bp 9% 2nd Prf | -0.32% | -0.50 | 156.50 |
| 9 |  |
National Grid Plc | -0.30% | -3.00 | 988.40 |
| 10 |  |
United Utilities Group Plc | -0.19% | -2.00 | 1,057.50 |
US close: Stocks jump despite election uncertainty as voting roll in
Traders were in a bullish mood despite ongoing uncertainty surrounding the outcome of the US presidential elections, with all three Wall Street benchmark indices rising by 1% or more.
The Dow rose 1.02% to 42,221.88, with 25 of its 30 constituents finishing in positive territory, while the S&P 500 climbed 1.23% to 5,782.76 and the Nasdaq jumped 1.43% to 18,439.17.
“US markets aren’t showing many signs of nervousness as voting gets underway. While the political tension in the US has been ratcheted up to a high level, the market has remained calm, showing some of the usual pre-election weakness but otherwise holding steady,” said Chris Beauchamp, chief market analyst at IG.
The race between former president Donald Trump and vice president Kamala Harris still remains too close to call, according to the final polling stats. And even after voting closes there is unlikely to be a clear winner for some time, with pundits warning that the final outcome may not be certain for many days due to individual states’ own ballot-counting processes.
“A clear winner within the next day would be the ideal outcome here, while a long, drawn-out legal challenge is likely to keep bullish sentiment in check,” Beauchamp said.
10-year US Treasury yields were relatively stable, down just 0.4 basis points on the day at 4.285%, while the US dollar index fell 0.5% to 103.42 – its lowest since 15 October.
Economic news
While the focus was firmly on the election, economic data was still making headlines.
The US trade deficit rose to its highest in 30 months in September as expected, jumping 19.2% to $84.4bn as businesses rushed to import goods before a planned – albeit later suspended – port strike in early October.
“We expect imports to outpace exports in the short term, as investment in data centres and semiconductors supports capital goods imports and a strong consumer pushes retailers to build out inventories,” said Matthew Martin from Oxford Economics. “The outcome of the election could add upside risk to imports if businesses seek to pre-empt potential tariff increases in the event of a second Donald Trump presidency.”
In other news, the S&P Global services PMI slipped to 55.0 in October, from 55.3 in September, slightly under analysts’ forecast for no change; while the ISM services PMI unexpectedly increased to 56.0 from 54.9, ahead of the 53.8 estimate.
Market movers
After an early surge, Truth Social owner Trump Media & Technology Group erased gains by the close to finish down 1% as election uncertainty kicked in. The stock has now lost 34% over the past five days alone.
Shares in software group Palantir Technologies soared 23% after the company beat forecasts comfortably with its third-quarter results, helped by a 40% jump in US government revenues.
Casino and hotels operator Wynn Resorts slumped 9% after missing estimates with its third-quarter revenues and profits.
Wednesday newspaper round-up: Eurostar, Asda, jobless rate
Cross-channel train operator Eurostar has been criticised by the advertising watchdog for exaggerating the number of £39 seats on sale. The Advertising Standards Authority (ASA) ruled that Eurostar ads across Instagram and Facebook for £39 tickets from London to Amsterdam and Brussels were misleading, the second time it has censured its ads this year. – Guardian
UK growth would be halved in the event Donald Trump wins the US presidential race and imposes the swingeing new tariffs he has threatened, a leading thinktank has warned. The National Institute of Economic and Social Research (NIESR) said the protectionist measures planned by the Republican challenger for the White House would result in weaker activity, rising inflation and higher interest rates from the Bank of England. – Guardian
Rachel Reeves’s inheritance tax raid on farmers will put food security at risk and leave Britain more reliant on foreign imports, suppliers have warned. Senior business leaders said the Chancellor’s decision to impose inheritance tax on farming assets worth more than £1m threatened to erode domestic food production. – Telegraph
Asda is ordering staff back to the office at least three days a week, while also cutting jobs in an attempt to halt the supermarket’s decline. The retail giant announced the change in an internal email on Tuesday, which will apply to more than 5,000 head office workers across three different locations in Leeds and Leicester. It comes just weeks after Mohsin Issa stepped down from running the business, with former M&S chief executive Lord Rose taking the helm as his interim replacement. – Telegraph
Specialist engineers working on Britain’s newest nuclear power station have gone on strike, saying they have not had a pay rise in four years and that cheap foreign labour is being used to undercut British workers. The cabling and pipework engineers, represented by the professional trade union Prospect, work on the Hinkley Point C nuclear power station being built in Somerset by EDF, as well as the Sizewell C project planned for Suffolk. – The Times
Unemployment will rise thanks to Rachel Reeves increasing employers’ national insurance contributions at the budget, experts have claimed. The National Institute of Economic and Social Research (NIESR), Britain’s oldest economic think tank, said the employers’ national insurance contributions (NICs) rise, which it characterised as a “tax on jobs”, would push up joblessness and constrain vacancies. – The Times
