Markets jump for joy as Conservatives win UK election

Yesterday was the day the nation took to the polls to decide who will be the next resident of Number 10 in the first Christmas election for nearly 100 years. 24 hours later and the Conservatives win with a majority of 364 seats – the biggest majority since the 1980s.

The battle was fierce – Jeremy Corbyn declared himself Brexit neutral while Boris Johnson took to hiding in a fridge to avoid an encounter with Good Morning Britain’s Piers Morgan.

In the run up to the election, markets remained relatively calm and stable amid campaign chaos, with little in the way of major swings. Since the start of November to December 12, the FTSE All Share has rose 1.7%.

The UK’s top 100 companies have also remained relatively resilient during the race, with the FTSE 100 (UK100) index climbing just over 1% since the start of November.
However, as soon as exit polls predicted a Conservative majority, the value of the pound increased by more than 2% to $1.34 – the highest level seen against the dollar since May 2018. In the stock market, the FTSE 100 rose 0.8%, while the FTSE 250 jumped 5% in early trade.

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Housebuilders, banks and utilities saw an increase in price following the Tory majority announcement. Severn Trent, which was threatened with nationalisation under Labour’s manifesto, posted huge gains and is expected to gain over the next few months. Retailers, Tesco and M&S, are expected to benefit from the result, too.

This morning (13.12.19), the domestically-facing FTSE 250 jumped 3.6% at the opening bell to 21,534.

The markets reaction came as the election result seemed to ease some of the uncertainty over Brexit, with more to come over the day and the coming months.
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