Europe open: UK election result in focus

5th Jul 2024 07:51

(Sharecast News) - European shares opened higher with the UK Labour Party's landslide election victory the main focus.

The pan-European Stoxx 600 index rose 0.32% in early deals to 519.36. Britain's FTSE 100 index climbed 0.37% in response to the Conservative Party - led by Rishi Sunak - being booted from office.

"Labour will form the next government in the UK but compared to 2019 it has been accompanied by little fanfare on financial markets. This moment has been on the cards since Liz Truss' short-lived premiership, and the lack of movement overnight in sterling is a testament to how much of a foregone conclusion this has been," said Chris Beauchamp, chief market analyst at online trading platform IG.

"There has been some buying of the pound among IG clients over the past 24 hours, but the lack of movement overnight in FX markets meant interest was limited as the news came in. The new PM has his work cut out for him, but for the moment financial markets are prepared to give him the benefit of the doubt."

In equity news, shares in Varta jumped by a third after the German battery maker said it's in talks with luxury car-maker Porsche over a potential investment in its large-format lithium-ion battery business.

UK housebuilders gained on the election result. The Labour Party has pledged a large home building programme and changes to planning laws. Barratt, Persimmon, Bellway and Vistry were all up.

Reporting by Frank Prenesti for Sharecast.com