Home Breaking News FTSE 100 back at the 6,000 level due to Biden’s win

FTSE 100 back at the 6,000 level due to Biden’s win

by LLB Editor
9th Nov 20 10:26 am

Even though Donald Trump has not yet conceded, markets have taken Joe Biden’s election victory to be a done deal which gives another leg up to global equities,” says Russ Mould, investment director at AJ Bell.

“Stocks had already started to move higher last week on the assumption there would be a divided government. This expectation extends into the new trading week following the latest voting figures which put Biden in first place.

“While the threat of legal action by Trump could delay proceedings, investors are pricing in almost zero chance for the incumbent to destabilise affairs. So that means the market is in risk-on mood with equities rising across Asia, Europe and pre-market indicative prices also suggest a good day for US stocks.

“The playbook is clear to see – investors are buying tech stocks again in the belief that there would gridlock in Congress and so Biden would find it hard to push through punitive tax measures that could have hit the tech sector. Tech is also one of the few places where there is expected to be sustained earnings growth at a time when economies are under pressure from the pandemic.

“Mining shares are also in demand in the belief that Biden would have a more predictable trade policy and that some tariffs on Europe and China could be rolled back, thus benefiting the commodities market.

“The FTSE 100 jumped 1.5%, putting it back at the 6,000 level. Big risers included Anglo American, up 3.8%, and tech-heavy Scottish Mortgage investment trust which advanced 3.3%.

“Germany’s Dax index traded 1.8% higher, Japan’s Nikkei 225 index moved 2.1% ahead, and it looks like the US Nasdaq index will open 1.8% up on Friday’s market closing price.

“For now, markets are having a party, yet it could be a different tone going into 2021 if it looks like the next round of fiscal stimulus measures in the US aren’t going to meet previous expectations, which could certainly be the case.

“Getting Covid-19 under control remains a priority as well as providing economic support and if there is no improvement going into the new year then markets could find reason to become unhappy again.”

Leave a Commment

CLOSE AD

Sign up to our daily news alerts

[ms-form id=1]