Westminster and voting image
FTSE 100 index opened up 42.18 points, 0.5% / Image source: Adobe

The FTSE 100 and FTSE 250 were in the green on Thursday morning, with Brits heading to polling stations to vote in the general election.

Based on surveys leading up to election day, it looks like Labour will win a majority, ousting the Tory’s after nearly a decade and a half in power.

Across the channel, French voters went to the polls for the first round of the legislative election on Sunday, and they return to them this week.

The FTSE 100 index opened up 42.18 points, 0.5%, at 8,213.30. The FTSE 250 was up 35.53 points, 0.2%, at 20,564.95, and the AIM All-Share was down just 0.34 of a point at 769.78.

The Cboe UK 100 was up 0.5% at 817.89, the Cboe UK 250 was up 0.5% at 17,934.78, and the Cboe Small Companies was up 0.1% at 16,968.98.

In European equities on Thursday, the CAC 40 in Paris was up 0.8%, while the DAX 40 in Frankfurt was up 0.5%.

Thursday’s focus is on the UK general election, with the polls opening up and down the country early Thursday. Polling stations will close at 2200 BST.

In a last minute blow to the Tory party on Wednesday, Labour has received the backing of tabloid the Sun.

The tabloid said it believes the Conservatives, over the past 14 years, have become a ‘divided rabble, more interested in fighting themselves than running the country’.

‘Labour is walking into this election with more than 20 points advance over the Tories – even the most Conservative parts of the country seem tired of a 14-year Tory rule. The two most likely scenarios are a good Labour majority with 150 seats – which is almost double Boris Johnson‘s 80-seat majority in 2019 - or a supermajority. Both will give the Labour a very large margin to pass whatever reforms they want to pass in the coming years,’ said Ipek Ozkardeskaya at Swissquote Bank.

‘Normally, investors prefer Conservatives as they have a better grip on spending and debt levels. But this time, even investors want to see Labour take over the reins.’

In France, a different story is unfolding, with the right wing leading polls and the first round of polls.

France’s prime minister on Wednesday urged voters to form a united front to block the far right in legislative elections, warning the anti-immigration party of Marine Le Pen was the only faction capable of winning an absolute majority.

With four days to go until the second round in the polls, France’s political future remains up in the air as the far-right National Rally party seeks to take control of government for the first time.

The RN dominated the first round of polls, presenting the party of Le Pen with the prospect of forming a government and her protege Jordan Bardella, 28, with taking the post of premier in a tense ‘cohabitation’ with President Emmanuel Macron.

Across the Atlantic, the US election has also grabbed headlines, with Joe Biden scrambling to save his US reelection bid.

In recent weeks, pressure has mounted on Biden to pull out following a disastrous debate showing, with the president himself reportedly saying the coming days could be make-or-break.

Markets in New York will be shut on Thursday as the nation celebrates its Independence Day.

In the US on Wednesday, Wall Street ended mixed, with the Dow Jones Industrial Average down 0.1%, the S&P 500 up 0.5% and the Nasdaq Composite up 0.9%. It was another record close for the S&P and Nasdaq.

The pound was quoted at $1.2748 early on Thursday in London, lower compared to $1.2768 at the equities close on Wednesday. The euro stood at $1.0794, lower against $1.0806. Against the yen, the dollar was trading at JP¥161.32, down compared to JP¥161.38.

In the FTSE 100, Smith & Nephew jumped 6.9% to the top of the index.

Activist investor Cevian Capital has taken a 5.0% stake in the London-based medical technology company.

Barclays edged up 1.8%.

Barclays said that Barclays Bank Ireland has agreed to sell its German consumer finance business to BAWAG PSK, a wholly-owned subsidiary of BAWAG Group AG. It said it has been sold for a small premium to net assets.

‘Consumer Bank Europe is a diversified retail banking business, with established credit card, consumer loan and deposit franchises serving customers in the German and Austrian markets,’ Barclays said.

Francesco Ceccato, chief executive of Barclays Europe, said: ‘The sale of Cons umer Bank Europe aligns with our ambition to simplify Barclays. In BAWAG, we believe we have found a strong and committed owner for the business’ journey forwards. This transaction will also allow Barclays Europe to focus on its Corporate and Investment Banking and Private Banking businesses.’

On London’s AIM, Distribution Finance jumped 22%.

The Manchester, England-based specialist bank said it expects full year results to be significantly ahead of market expectations.

CEO Carl D’Ammassa commented: ‘2024 has started exceptionally well, with strong operational and commercial execution as well as portfolio management and control. Our products and services clearly resonate with our customers and seeing continued record new loan origination is a testament to the entire team’s focus on providing high quality service and the deep relationships we have with our dealer and manufacturer partners.’

In Asia on Thursday, the Nikkei 225 index in Tokyo was up 0.8%. In China, the Shanghai Composite was down 0.8%, while the Hang Seng index in Hong Kong was up 0.3%. The S&P/ASX 200 in Sydney closed up 1.2%.

Brent oil was quoted at $86.63 a barrel early in London on Thursday, up from $86.33 late Wednesday. Gold was quoted at $2,357.90 an ounce, lower against $2,361.74.

Still to come on Thursday’s economic calendar, there is a UK construction PMI reading at 0930 BST.

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Issue Date: 04 Jul 2024