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UK stocks climb more than 1% after Boris Johnson quits as PM
Global Banking & Finance Review®
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By Sruthi Shankar and Bansari Mayur Kamdar
(Reuters) – UK stocks climbed on Thursday, with the domestically focussed FTSE 250 index hitting a one-week high, after Boris Johnson announced he would quit as British prime minister after he dramatically lost the support of his ministers.
The export-oriented FTSE 100 gained 1.1%, while the FTSE 250 midcap index climbed 1.5% after Johnson’s statement.
Sterling was last up 0.5% against the dollar, roughly where it was trading before Johnson resigned.
The currency hit two-year lows versus the dollar on Wednesday after the resignation of top ministers left the government dangerously close to paralysis.
“The question was the timing that now happened a bit sooner than was generally expected, but the outcome was not a huge surprise,” Jonas Goltermann, senior markets economist at Capital Economics, said.
“Part of it is just the equities everywhere going up today in a bit of a relief rally… The balance between UK specific factors and global factors is so heavily skewed towards global factors that UK news about who’s going to be Prime Minister is just not enough to generate that much of a move.”
Oil & gas stocks boosted the commodity-heavy FTSE 100, with Shell up 3.0% after the oil major said it would reverse up to $4.5 billion in writedowns on oil and gas assets.
Miners Glencore and Ango American rose more than 6% each as copper prices rebounded from 20-month lows on news of possible stimulus in China. [MET/L]
Worries about economic growth and soaring inflation continued to dominate global market mood, with investors now looking to the earning season for signs on how companies are faring amid costs and weakening consumer confidence.
Persimmon fell 5.0% after Britain’s second-largest housebuilder said the number of homes it delivered in the first half was lower than expected.
The broader housing index declined 1.2% even as mortgage lender Halifax said house prices in Britain surged by 13%, the most since 2004 in the 12 months to June. The index is hovering near its lowest level since October 2014.
(Reporting by Sruthi Shankar and Bansari Mayur Kamdar in Bengaluru; Editing by Shounak Dasgupta and Andrew Heavens)
The FTSE 100 is a stock market index that represents the 100 largest companies listed on the London Stock Exchange, reflecting the performance of the UK stock market.
Currency exchange is the process of converting one currency into another, often for trade or investment purposes, and is influenced by various economic factors.
Inflation is the rate at which the general level of prices for goods and services rises, eroding purchasing power and affecting economic stability.
The FTSE 250 is a stock market index that includes the 250 largest companies on the London Stock Exchange, excluding the FTSE 100, providing insights into the performance of mid-cap stocks.
Oil and gas stocks are shares in companies involved in the exploration, extraction, and production of oil and natural gas, which can be influenced by global energy prices.
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