8th May 2015
The FTSE 100 opened 138 points higher this morning as the Tories push towards a shock majority after a tense election night.
The blue chip index moved up 2.1% when markets opened this morning and currently sits at 6,964, as it appears the Conservatives will not have to go into coalition.
The rise was led by energy, housebuilding and banking stocks, the two sectors that had been most shaky pre-election as they had the most to lose under a Labour government which had threatened to bring in increased tax and regulatory burdens.
Taxpayer owned banks saw large rises, with Lloyds up 6.3% to 87.4p and Royal Bank of Scotland up 5.8% to 351.3p. Other banks also gained, with Barclays rose 4.5% to 260.1p and HSBC, which has threatened to relocated away from the UK on the back of an increase in the bank levy, increased 1.1% to 637.9p.
Housebuilders performed well this morning; Persimmon rose 5.8% to £17.47 and Barratt Developments climbed 5.4% to 540.5p, reversing the nervousness seen in recent week.
Energy stocks were also soaring this morning, with investors relieved that energy companies would not be subject to a Labour price freeze policy. Centrica – which owns British Gas – jumped 7.9% to £10.60 and SSE climbed 5.2% to £16.46.
Michael Hewson, chief market analyst at CMC Markets, said: ‘While the final results aren’t yet in, it is slowly becoming apparent that the Labour party and Liberal Democrats have come up well short of their expectations.
‘Given the contents of the Labour party manifesto, this equity market and sterling surge is likely to be more relief that none of these measures will come to pass.’