Following years of market instability under the Conservatives, investors’ expectations of a time of stability have been reflected in the surge in shares of key corporations on the UK stock exchange.
The elite FTSE 100 increased by 0.4% in early trading following its best day in nearly two months the day before.
At one point, the domestically focused FTSE 250 increased 1.7%, reaching its highest level since April 2022.
In reaction to the outcome of the UK election, European equities also reached highs greater than one week ago.
With a 0.4% gain, the European STOXX 600 index reached its highest point since June 26.
As a result of Sir Keir Starmer’s party’s significant victory, which ended 14 years of Conservative rule, the pound remained stable.
At $1.28, the highest level since mid-June, sterling increased by 0.1% versus the dollar. It also increased by 0.01% versus the euro, to €1.18.
The financial markets had already factored in and overwhelmingly anticipated Labour’s win.
“A landslide victory provides the sort of clarity and stability that equity markets need in an increasingly volatile world,” stated Ben Ritchie, head of developed market equities at abrdn.
“If the new government get this right, businesses with significant exposure to the UK economy should be the likely winners.”
