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US elections test stock markets’ resilience

by LLB Editor
6th Nov 20 9:21 am

Global markets continue to feel more comfortable about the likely outcome of the US election and so equities press ahead once again. It’s an interesting change of fortunes with investors feeling nervous only a week ago,” says Russ Mould, investment director at AJ Bell.

“As it currently stands, the FTSE 100 is on track to end the week nearly 6% ahead and the S&P 500 has already rallied 7% in the first four days of the week.

“The US market last night was particularly strong, with the main indices rising 2% or more.

“On Friday, the FTSE 100 pushed ahead by 0.3% to 5,925, led by financials, miners, energy and real estate. Injecting some fizz into the markets is another wave of takeover activity.

“RSA’s approach from Canada’s Intact and Denmark’s Tryg has excited the market with investors bidding up shares in Aviva, Legal & General and Prudential in the hope that there could be further consolidation in the market.

“RSA’s bid situation also puts the spotlight back on UK equities and the fact many of them are very cheap in the eyes of overseas buyers. The UK finally sorting out a Brexit trade deal could be a trigger for more takeover action as it would remove some of the uncertainty that has depressed the UK market for so long.

“The Wellcome Trust’s bid for Urban & Civic had positive read-across to real estate stocks, making investors sit up and question if there was underappreciated value elsewhere in the sector.

“In Japan, the Nikkei 225 index closed at its highest level since 1991 with materials, utilities and industrials leading the charge at the end of the trading week.”

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