Premarket London: Sterling, FTSE Set to Open Higher on Tory Triumph
Investing.com
Published Dec 13, 2019 02:14AM ET
Updated Dec 13, 2019 02:43AM ET
Investing.com -- The pound and U.K. stocks were set to open sharply higher Friday after Prime Minister Boris Johnson’s Conservative Party scored a decisive win in the U.K. general election, breaking a three-year deadlock over Brexit and banishing the threat of a left-wing government with an agenda of nationalization and hostility toward much of the financial sector.
By 2:45 AM ET (0745 GMT), the pound had settled into range around $1.3422, some 2% up from late Thursday, albeit that was nearly 1c down from an initial 17-month high of $1.3515.
The pound also rose to its highest against the euro since the 2016 referendum on leaving the EU, before retracing slightly to 1.2022, a gain of 1.7%.
With forecasts pointing to a Conservative majority of 78, the way is now clear for Johnson to pass his EU Withdrawal Bill, formally taking the U.K. out of the bloc after 46 years of membership. He’ll then have a year to negotiate a free-trade deal with the EU before the designated transition period ends.
In the meantime, Johnson has promised a sharp rise in public spending on everything from police to hospitals and schools and renewable energy, a program that, if implemented fully, would represent a major fiscal stimulus.
As such, domestic-themed stocks are set for strong gains at the open – with homebuilders, banks, retailers and utilities all likely to be in demand.
There were no regulatory disclosures from FTSE 100 companies Friday.
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Written By: Investing.com
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