FTSE rallies as Labour wins outright majority / Image Source: Adobe

Stock prices in London were in the green at midday Friday, as Labour won their first general election since 2005, with party leader Keir Starmer set to become prime minister shortly.

There are just two seats to go, with Labour so far scoring a landslide of 412 seats.

The FTSE 100 index was up 6.08 points, 0.1%, at 8,247.34. The FTSE 250 was up 224.64 points, 1.1%, at 20,834.98, and the AIM All-Share was up 4.96 points, 0.6%, at 774.38.

The Cboe UK 100 was up 0.1% at 821.00, the Cboe UK 250 was up 1.3% at 18,176.43, and the Cboe Small Companies was down slightly at 16,989.04.

In European equities on Friday, the CAC 40 in Paris was up 0.3%, while the DAX 40 in Frankfurt was up 0.6%.

‘The general election has resulted in a significant political shift for the UK and investors appear to welcome the changing of the guard, judging by how the more domestically focused FTSE 250 got off to a very strong start,’ says Dan Coatsworth, investment analyst at AJ Bell.

‘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.’

Rishi Sunak has apologised after leading the Conservatives to their worst ever election result as a Labour landslide swept Keir Starmer to No 10.

The outgoing prime minister said he would quit as Tory leader once arrangements are in place to choose his successor, potentially triggering another round of Conservative infighting as MPs scramble to replace him.

Starmer will become prime minister after a Tory rout which saw former premier Liz Truss and a dozen serving Cabinet members lose their seats.

After 648 of the 650 Commons seats had been declared, Labour had a majority of 176. Labour had 412 seats and the Tories 121.

French President Emmanuel Macron congratulated the labour leader on his election victory Friday, saying his country would seek to cooperate with Britain on security, technology and climate.

In France, its just three days before Sunday’s run-off in France’s most critical legislative elections in recent history.

French far-right leader Marine Le Pen insisted her party can still win control of parliament despite the centre and left scrambling to block her way and football hero Kylian Mbappe urging fans to outvote ‘those people’.

A poll has projected that Le Pen’s National Rally, RN, would fall short of an overall majority despite dominating the June 30 first round vote.

Away from politics, there is US non-farm payroll data, which is due for publication on Friday afternoon.

The US is expected to have added 190,000 new non-farm jobs in June, easing from 272,000 a month earlier.

Ipek Ozkardeskaya at Swissquote Bank commented: ‘The US will reveal its latest jobs figures today and the Federal Reserve (Fed) doves are waiting in ambush to boost their rate cut bets.’

Stocks in New York were called higher, ahead of the reading. The Dow Jones Industrial Average and the S&P 500 index were both called up marginally, and the Nasdaq Composite up 0.2%.

The pound was quoted at $1.2786 at midday on Friday in London, higher compared to $1.2765 at the equities close on Thursday. The euro stood at $1.0826, up against $1.0812. Against the yen, the dollar was trading at JP¥160.67, lower compared to JP¥161.16.

In the FTSE 100, housebuilders were trading at the top of the index. Persimmon, Barratt Developments, and Taylor Wimpey were up 3.4%, 3.3%, and 3.2% respectively.

Numbers from mortgage lender Halifax showed that annual growth in UK house prices quickened last month, but edged lower on a monthly basis.

UK house price growth quickened to 1.6% in June on-year, from 1.5% in May.

Prices edged 0.2% lower in June from May, having being flat a month earlier.

There were few companies in the red in the FTSE 100. However, Shell lost 1.8%.

The oil firm said expects to take a hit of up to $2 billion after it suspended construction work on one of Europe’s largest planned biofuels plants and sold a refinery in Singapore.

In the FTSE 250, Softcat lost 4.8% making it the worst performer on the index at midday.

Jefferies cut the provider of IT infrastructure technology and services’ ’buy’ rating to ’underperform’.

On London’s AIM, PipeHawk plummeted 74%, after it said that due to ‘severe financial pressure’, it is taking steps to potentially place its subsidiary QM Systems into administration.

In late March, when it published its half-year results, PipeHawk said that QM was experiencing a number of challenges. But, it hoped it would receive ‘two material orders’.

On Friday, however, PipeHawk said that the orders ‘will not be forthcoming.’

Brent oil was quoted at $87.29 a barrel at midday in London on Friday, down from $87.44 late Thursday.

Gold was quoted at $2,363.60 an ounce, higher against $2,358.90.

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Issue Date: 05 Jul 2024