UK stocks set for strong open on Brexit news
UK assets are expected to open stronger thanks to the conclusive election result overnight.
The FTSE 100 is set for a strong open this morning, as UK assets benefit from the election result and the China deal news. A significant level of uncertainty looks to have been lifted from UK assets, and we could see the FTSE 100 and FTSE 250 gain from here, having successfully rebounded over the past couple of days.
Key winners in the wake of the news will be UK-focussed stocks, with housebuilders in the frame for further gains, as the sector is supported by hopes of a return to UK economic growth and the removal of fears that a Labour government would impose a more punitive taxation regime. Other gainers today could well be financial services stocks – this might seem odd, given how the new government has won power promising a hard Brexit, but with such a solid majority Boris can afford to pivot away from this position, boosting hopes of a deal that will allow UK banks access to EU markets without excessively-onerous intervention.
As well as the domestic stocks that are set to gain, we should watch out for more international names that might struggle as the pound continues to strengthen. Sectors such as pharma and mining rallied on the day of the Brexit result as sterling weakened, but today the reverse could be in play. A stronger pound hits overseas earnings, and could result in a tough day for miners like BHP Billiton and Rio Tinto, along with the pharmaceutical giants AstraZeneca and GSK.
It will be interesting to see whether the election result helps to reverse the negative view of UK assets that has prevailed since 2016. There is a lot of work to be done in securing a new relationship with the EU, and the time this may take cannot be understated, but perhaps a steady flow of investor funds will help the UK’s stock market make up some lost ground.
IGA, may distribute information/research produced by its respective foreign affiliates within the IG Group of companies pursuant to an arrangement under Regulation 32C of the Financial Advisers Regulations. Where the research is distributed in Singapore to a person who is not an Accredited Investor, Expert Investor or an Institutional Investor, IGA accepts legal responsibility for the contents of the report to such persons only to the extent required by law. Singapore recipients should contact IGA at 6390 5118 for matters arising from, or in connection with the information distributed.
This information/research prepared by IGA or IGA Group is intended for general circulation. It does not take into account the specific investment objectives, financial situation or particular needs of any particular person. You should take into account your specific investment objectives, financial situation or particular needs before making a commitment to trade, including seeking advice from an independent financial adviser regarding the suitability of the investment, under a separate engagement, as you deem fit. No representation or warranty is given as to the accuracy or completeness of this information. Consequently any person acting on it does so entirely at their own risk. In addition to the disclaimer above, the information does not contain a record of our trading prices, or an offer of, or solicitation for, a transaction in any financial instrument. Any views and opinions expressed may be changed without an update.
Please see important Research Disclaimer.
Seize a share opportunity today
Go long or short on thousands of international stocks.
- Increase your market exposure with leverage
- Get spreads from just 0.1% on major global shares
- Trade CFDs straight into order books with direct market access
Live prices on most popular markets
Prices above are subject to our website terms and agreements. Prices are indicative only. All shares prices are delayed by at least 15 mins.