London pre-open: Stocks seen up as Brits wake up to Labour victory

5th Jul 2024 07:10

(Sharecast News) - London stocks were set to rise at the open on Friday as Brits woke up to the first Labour government in 14 years.

The FTSE 100 was called to open around 15 points higher.

At 0655 BST, Labour had a confirmed 408 up 209, while the Tories were on 113, down 242. The Liberal Democrats were on 69, a gain of 61 and the SNP held on to eight seats, a loss of 37, in a shocking night where it surrendered seats to a resurgent Labour north of the English border in a voter backlash over scandals within the SNP.

Britain's Labour Party won the General Election and looked to be on course for a massive 170 seat majority.

Chris Beauchamp, chief market analyst at IG, said: "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.

"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."

On the macroeconomic front, the US non-farm payrolls report for June is due at 1330 BST, along with the unemployment rate and average earnings.

On home shores, the latest data from Halifax showed that house prices were broadly stable in June.

Prices were down 0.2% on the month following a flat result in May. On the year, prices were 1.6% higher in June, in line with the previous month.

Amanda Bryden, head of Mortgages at Halifax, said: "This continued stability in house prices - rising by just +0.4% so far this year - reflects a market that remains subdued, though overall activity has been recovering. For now it's the shortage of available properties, rather than demand from buyers, that continues to underpin higher prices.

"Mortgage affordability is still the biggest challenge facing both homebuyers and those coming to the end of fixed-term deals. This issue is likely to be eased gradually, through a combination of lower interest rates, rising incomes, and more restrained growth in house prices.

"While in the short-term the housing market is delicately balanced and sensitive to the pace of change to Base Rate, based on our current expectations property prices are likely to rise modestly through the rest of this year and into 2025."

There wasn't much on the corporate front, but investors were mulling a second-quarter update note from Shell.