FTSE 100 dips, Europe mixed and Wall Street holds near record high as Labour wins UK general election
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.”
Follow along for live updates throughout the day:
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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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10 homes geared up for outdoor entertaining
The upside of living in a country with such unreliable weather is that we appreciate sunny days all the more – and for many people that means spending as much time in the garden as possible.
If you love nothing better than throwing a summer party and are considering a move, finding somewhere with a well-designed outdoor entertaining area is bound to be a priority.
All these for-sale properties fit the bill perfectly, you could be hosting a housewarming on your new patio sooner than you think.
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Shell suffers $2bn hit on biofuel project and refinery
File photo dated 08/04/15 of a company logo at a Shell petrol station in London. Shell expects to take a hit of up to two billion US dollars (£1.6 billion) after it paused construction work on one of Europe’s largest planned biofuel plants and sold a refinery in Singapore. Issue date: Friday July 5, 2024. (Yui Mok, PA Images) Shell (SHEL.L) expects to take a hit of up to $2bn (£1.6bn) after it paused construction work on one of Europe’s largest planned biofuel plants and sold a refinery in Singapore.
The oil and gas giant said it expects the decision to stop building work on the biofuels plant in Rotterdam in the Netherlands, which it announced earlier this week, to cost up to $1bn.
Meanwhile, it said the move to sell its Bukom refinery in Singapore will cost between $600m and $800m.
The company’s share price slipped from 2,917.50p as markets opened on London to 2,897.50p, broadly in line with its trading levels earlier this week.
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Where did house prices fall?
In England, the steepest rate of house price inflation was in the north west, up by 3.8% over the last year, to an average property price of £231,351.
House prices in Scotland also rose, with a typical property now costing £204,663 — 1.6% more than the year before.
In Wales, house prices grew annually by 2.7% to reach £220,197.
Eastern England was the only region or nation across the UK to register a decline in house prices over the last year, where they now average £328,747, down 0.9% in June on an annual basis.
London continues to have the most expensive prices in the UK, now averaging £536,306, up 0.9% year on year.
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Pound rises after Labour’s landslide victory
The pound ticked up slightly against the euro (GBPEUR=X) and dollar (GBPUSD=X) on Friday morning in London, as Keir Starmer’s Labour party were elected to government.
Sterling was trading at $1.27, up around 0.1% before the opening bell in London. It was almost flat against the euro, trading at almost 1.18.
As results continued to trickle in, Labour won 410 seats to the incumbent Conservative government’s 119. Prime minister Rishi Sunak has now conceded defeat.
Labour’s election victory has been anticipated for weeks, as the party pulled more than 20 points ahead in some polls during campaigning. The muted reaction of sterling reflects the fact that there were few big surprises as counts trickled in on Thursday night, going into Friday.
The pound has risen since the election was called, and is the strongest-performing major currency agains the dollar this year — gaining 0.3%, according to Reuters.
Naeem Aslam, chief investment officer at Zaye Capital Markets, said:
“The change in leadership from the Conservative party to the Labour party after a decade has made investors optimistic that finally we will have someone who can actually heal some of the self-inflicting injuries like Brexit and bring the economy back on track.”
“This is due to the fact that the Conservative party primarily enriched the wealthy, while the rest of the nation saw their disposable income rapidly diminishing.”
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Watch: ‘Change begins now’: says Starmer after UK election win
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