FTSE 100 shares closed higher on Wednesday in a snap back from initial losses on news of Donald Trump's US presidential election victory.
A market rout predicted after big falls on Asian indexes and broker Citigroup’s fears of a 5% drubbing for Wall Street’s S&P 500 index failed to materialise. A calming victory speech by Trump appeared to help steady markets for now.
The FTSE 100 closed up 1% at 6,911.84 and led by Ashtead Group plc (LON:AHT) up 11.5% at 1387p.
Gold producers Randgold and Fresnillo saw big rises as investors moved to safer assets. The second-higher riser was Fresnillo (LON:FRES) up 10.7% to 1771p and followed by Antofagasta Holdings (LON:ANTO) up 8.9% to 641.5p. Randgold (LON:RRS) was up 5% to 7115p.
Sainsbury's (LON:SBRY) fell 6.6% to 238.7p on news of lower sales and profits.
The FTSE 250 mid-caps ended up 0.8% at 17,590 and led by Hill & Smith Holdings plc (LON:HILS) up 7.8% at 1147p.
It was also a good day for the currency.
“Sterling has hit a one-month high against the euro following a significant move of around 3% volatility. The move seems to have been fueled by the dollar sell off in the morning and EUR sell-off in the afternoon as a result of Donald Trump's US presidential victory early this morning,” said Caxton FX Corporate Account manager Bartek Zakrzewski.
However, smaller stocks had a tough ride. Tthe FTSE AIM 100 Index ended down 0.1% at 3833 and the FTSE AIM All-Share Index down 0.3% at 799.
In spite of the headline gains by London stocks, only 28% of them rose, while 46% fell.
Gold stocks on the March
Tate is gumped by Trump (and the peso)
Sainsbury under pressure from Tesco
FTSE 100 up 24 points
Gold stocks are on the march following the election of Donald Trump with the weakness of the dollar and the metal’s safe haven status sending the price soaring. The knock-on impact for the miners was positive with Fresnillo (LON:FRES) leading the way with a 10% rise. The Mexico-focused group was also one of the few local beneficiaries of a weaker peso. Among the smaller caps Pan African Resources (LON:PAF) and Highland Gold (LON:HGM) were also in demand. Tate & Lyle (LON:TATE), meanwhile, is negatively exposed to the Mexican currency as well as the declining dollar. As a result the shares nose-dived 11%.
The market really didn’t like the half-term update from J Sainsbury plc, down 6% after the latest figures revealed its core grocery business was under attack from a revitalised Tesco PLC (LON:TSCO).
The FTSE 100 was up 24 points at 6,866.18.
2.30pm
FTSE 100 recovers after early slide, up 40 points at 6,884
Dow, S&P 500 and Nasdaq lose down ess than 0.5% in early deals
Winners come are precious metal stocks, pharmaceutical, and US construction
Trump is good for hydrocarbons business
What has happened to the panic, presumed in the early hours of Wednesday, as investors in London woke up to the news that Donald Trump would be the 45th president of the United States.
Predictions of a stock market bloodbath have yet to be reflected in the real life reaction to Trump’s victory.
Wall Street indices are only slightly lower. The Dow Jones dipped 35 points, 0.2%, to 18,297 while the S&P 500 and Nasdaq lost 0.2% and 0.3% respectively.
London’s FTSE 100, instead, is this afternoon now trading in positive territory, up almost 40 points or 0.6% changing hands at 6,883.
Stockbroker Hargreaves Lansdown says trading volumes are double normal levels.
But, while the market may have seen a busy session of trading there simply isn’t the same kind of volatility seen in the wake of the Brexit vote.
According to Hargreaves the elevated trading was “much lower” than the day after Brexit, when dealing volumes were six times above normal levels.
Laith Khalaf, Hargreaves’ senior analyst, said: “the market is not utterly dominated by election fever, perhaps because of the lack of a clearly identifiable Trump trade, and other drivers are also at play in the UK stock market.”
“Overall a Trump victory has so far failed to trigger the global stock market panic that many expected. As with Brexit, this is a cautionary reminder not to try to base investment strategies on the outcome of political events.”
13:30 - FTSE 100 rallies after early Trump slump
Far from the battering predicted when the result of Donald Trump’s victory came through early this morning, FTSE100 has been relatively calm since the early volatility.
At lunchtime, the index was down 13 at 6,832 having managed nose into the blue a couple of times during the morning.
There have been casualties. The Mexican peso took a pounding and dropped by 11% at one point against the US dollar.
Trump has famously promised to build a wall to keep out illegal immigrants coming over the border and to return all of those that have made into the US.
Gold miners, pharmaceutical stocks and defence companies were all doing well in London.
Mexico –based gold and silver miner Fresnillo (LON:FRES) had a double boost of not only some safe haven buying but an earnings lift from the collapse in the peso. Shares jumped 10% to 1,762p
Shire Plc (LON:SHP) lead the pharma rally adding 6% to 4,794p as the prospect of price curbs on US drugs dissipated with the defeat of Hillary Clinton.
Plant hire group Ashtead (LON:AHT) has a large US operation and rocketed 9% to 1,354p.
It was a good day to bury bad news, but J Sainsbury (LON:SBRY) did not go deep enough, shedding 5.5% to 241.5p as it reported a set of lacklustre sales numbers.
Marks and Spencer PLC (LON:MKS) almost matched it after its disappointing update yesterday. Shares fell 3.9% to 318.4p.
“Sainsbury's grocery business is undoubtedly finding life tougher going now than it has been the case for some years,” said Clive Black of Shore Capital.
11.45 - FTSE 100 rallies after early Trump slump
Connor Campbell at Spreadex believes the market's much calmer than expected reaction to the Trump victory reflects uncertainty over what his policies are and will be.
"We haven't yet entered the era of Trump. It's too early to make a call on what his policies, undefined as they are, will eventually be."
Heading towards lunchtime, FTSE100 was down 47 at 6,791
11:30 - President Trump will be a boon for hydrocarbons
Trump’s presidency is expected to provide a boon for hydrocarbons business.
But Brendan Long, analyst at stockbroker WH Ireland, says that broader political and economic uncertainties are weighing on oil prices.
Brent crude was steady at US$46 per barrel, while West Texas Intermediary was down 0.3% changing hands at US$44.85.
“We believe that President Trump will be against regulation in principle and unsympathetic with climate change policies, which is favourable for coal, oil and gas (both for US supply and demand)," the analyst said.
11.00 - FTSE 100 continues rally towards positive territory
The FTSE 100 hasn’t subscribed to the ‘mass destruction’ theory issued by some commentators this morning.
Despite its initial losses, the blue chip index has rallied hard throughout Wednesday morning and was even marginally up on yesterday’s close at one point.
It’s slipped a little since then, but is still only 4 points down today to sit at 6,839 just before 11am.
Mosman Oil And Gas Ltd (LON:MSMN) has enjoyed a better morning than most and is up 132% so far today after it announced that it had acquired a producing oil field in Texas for an “attractive” price of £786,000.
Diamondcorp Plc (LON:DCP) was one of the biggest fallers amongst the small caps, slipping 5% to 2.2p after it drew down a further £300,000 from its short-term financing facility.
10.45 - Bookies release Trump betting specials
For those who like a flutter, UK bookmakers have just started releasing some of their Donald Trump specials.
The Donald is 66/1 to paint the White House gold during his Presidency, 6/4 to appear in court during his tenure, while you can get 12/1 for Hillary Clinton to be arrested before the end of 2020.
Unsurprisingly, Paddy Power is offering 4/1 for Trump to build a wall covering the entirety of the US-Mexican border before the end of 2020.
As for the first country he visits as ‘the most powerful man in the world’, Russia is the favourite amongst the bookies at evens, while the UK is behind Mexico and Israel at 4/1.
10.15 - Theresa May welcomes President-elect Trump
"We are, and will remain, strong and close partners on trade, security and defence. I look forward to working with President-elect Donald Trump, building on these ties to ensure the security and prosperity of our nations in the years ahead."
9.56 - Armageddon postponed, as Trump drops the bombast
Against all expectations, the FTSE 100 is making a decent stab at heading towards positive territory.
Armageddon has been postponed, with markets seemingly mollified by a gracious, presidential victory speech by Donald Trump that was low on his customary bombast and high on conciliation.
He even found time to say nice things about Hillary Clinton, and there was no mention of putting her in jail once he is sworn in as President.
The FTSE 100 was down 15 points at 6,828, having fallen as low as 6,696 at one point.
J. Sainsbury PLC (LON:SBRY) and Experian PLC (LON:EXPN) prove that Hillary Clinton was not the only one delivering shocking results this morning.
Supermarket chain Sainsbury’s was off 5.5% after interims that revealed, in the words of chief executive Mike Coupe, that the market remains competitive and pricing pressures have continued to have an impact on margins.
The pension deficit has risen by around £400mln to £1.3bn since the end of the financial year.
Credit checker Experian shed 4.3% at 1,452p as it announced a shake-up of its marketing division, which has been performing sluggishly. Half-year profit before tax rose 14% to US$520mln from US$458mln the year before.
8.45 - US election costs cocky Paddy Power US$5.5mln
UK bookmaker Paddy Power Betfair plc (LON:PPB) has been hit for its biggest political payout ever in the wake of Trump's victory.
Paddy Power had already paid out US$1mln dollar last week to customers who backed Hillary Clinton and has now been hit for US$4.5mln by customers who backed Trump.
The bookie said: "We're in the business of making predictions and decided to put our neck on the line by paying out early on Hillary Clinton, but boy do we get it wrong."
D’oh – We’ve been Trumped! Here’s how we paid out $4.5m after The Donald’s win: https://t.co/mgdtrD7ZOI #ElectionNight
— Paddy Power (@paddypower) November 9, 2016
8.20 - Brexit on stilts
It wasn’t quite the carnage the financial speculators had been predicting, but the FTSE 100 did fall sharply after Donald Trump swept his way to the White House.
At 8.15am, the index of blue-chip shares was down 82 points at 6,761.27 having hit a low of 6,696.33 in the opening seconds of trading.
The spread-betting firms had been suggesting more than 200 points would be wiped off the Footsie.
To borrow a phrase coined by baseball great Yogi Berra: It's like déjà vu all over again.
Well at least that was the feeling among market commentators and investors, who are comparing the Trump victory with Britain’s surprise decision to exit the EU.
“The surge in anti-establishment sentiment is definitively global. Brexit can no longer be dismissed as a freak event. It is a trend,” said Eric Lonergan, a fund manager at M&G, one of Britain’s biggest investment firms.
“Donald Trump won by defying his party, the media, and conventional politics. Populism is coming to power. The critical issue now is what this mean in practice.
“The immediate market reaction is predictable. Risk assets have fallen sharply, safe assets are rallying, and the dollar is falling. It's deja vu all over again. Like Brexit, will we see a reversal in asset prices in the next weeks or months?”
6.30 - Bloodbath predicted
London is set for a bloodbath after Donald Trump was the shock runaway winner in the US election.
Republican Trump's margin of victory was so large that his Democrat rival Hillary Clinton phoned him to concede before the full results were in.
Befoer the call between the two candidates, latest results showed Trump had 264 of the 270 college votes he needed to claim victory after winning in Florida.
Financial spread bet firms put FTSE100 down 240 points in early trading as the scale of the potential win began to emerge.
In the Congressional election the Republicans also took control of both houses, something that will take time to assess said Dominic Rossi at fund manager Fidelity.
“The immediate sense of bewilderment at the shift rightwards in American politics will need to give way to a more sober risk assessment.
“Republican control of both Houses offers an opportunity to break the political gridlock of recent years in domestic areas of policy. There will be an eagerness to roll back many Obama initiatives, above all Obamacare."
US futures suggest the Dow Jones Industrial Average will open down more than 650 points or almost 4%.
Gold jumped US$46 per ounce the the dollar slumped 1.7% against the euro.
Headlines
- Trump powers towards White House after shock victories – The Times
- Echoes of Brexit as panicked global markets take a nose dive – The Times
- Pfizer to close two manufacturing sites in UK with 370 job losses – Daily Telegraph
- Spy agency GCHQ investigates Tesco Bank cyber theft amid fears it was 'state sponsored' – Daily Telegraph
- Electric car maker Tesla eyes UK base after making first European foray – Daily Telegraph
- UK companies need more women on executive committees, says review – The Guardian
- Financial markets set for record falls after Asian shares battered by Trump surge – The Guardian