London close: Stocks recover from shock of Trump presidency

London stocks recovered from the initial shock of Donald Trump being elected US President, as it made an interest rate hike by the Federal Reserve seem less likely this year.

The FTSE 100 initially fell on the news of Trump’s presidency but finished the session up 1.0% to 6,911.84 points, led by mining, industrial and pharmaceutical stocks. The pound held onto its gains against the dollar throughout the session, rising 0.63% to $1.2457 at 1541 GMT.

Shares of drug companies, including Hikma Pharmaceuticals and Shire, were lifted higher by the US election result. A win by Democratic candidate Hillary Clinton was seen as bad for the sector because she had wanted to increase regulation and combat high drug prices.

Ashtead and CRH advanced on the back of Trump’s comments about raising infrastructure spending.

Mining shares, including Randgold Resources, Fresnillo and Glencore, were boosted by a jump in gold prices as investors fled to safety in light of the US election outcome.

“The immediate flight to safety as Trump’s victory became clear saw gains for the likes of gold and the yen, at the expense of the Mexican Peso, the dollar and stocks,” said IG’s Joshua Mahony.

“However, markets swiftly regained composure with many investors realising that they simply do not know what this means for the US economy. Markets hate uncertainty, yet for now they have to live with that, given the election of one of the most unpredictable Presidential candidates in history.”

The analyst added that investors have cheered the prospect of the Fed holding off on raising interest rates in December given the heightened uncertainty a Trump presidency brings.

“However, with the stock market weakness largely dissipating and a new President who has called the Fed corrupt for keeping the rates low to facilitate Clinton’s campaign, there is reason to believe December could still be live,” Mahony said.

On the downside of corporate stocks, Sainsbury's slumped after it cut its interim dividend 10% as underlying profits fell the same amount despite revenues increasing as the decline in like-for-like sales eased off in recent months.

Global information services company Experian was also on the back foot after the release of its half-year results, with 5% organic revenue growth to $2.24bn, which was in line with its board’s target range.

On the economic data front, the UK trade deficit widened to £5.2bn in September from £3.8bn in August, according the Office for National Statistics. Economists had expected a deficit of £3.9bn.

Exports fell by £0.2bn while imports rose by £1.2bn, with the wider gap driven by a record £8.7bn deficit with the European Union.

While the pound has fallen sharply since the Brexit vote, the ONS said there was little direct evidence so far of its impact on trade.

In China, the consumer price index increased an annualised 2.1% in October, as expected by analysts, following 1.9% growth the previous month, the National Bureau of Statistics said.

The producer price index jumped 1.2% year-on-year compared to just 0.1% in September and estimates of 0.8%, boosted by an increase in the price of industrial commodities, including rising coal prices.

Meanwhile, oil prices wavered following the US election result but quickly recovered despite data from the Energy Information Administration showing crude inventories Stateside rose by 2.4m barrels in the week through 4 November, more than the 1.3m barrel increase expected by analysts.

Brent crude rose 0.88% to $46.45 per barrel and West Texas Intermediate increased 1.05% to $45.46 per barrel at 1652 GMT.

Market Movers

FTSE 100 (UKX) 6,911.84 1.00%
FTSE 250 (MCX) 17,590.99 0.82%
techMARK (TASX) 3,371.79 2.16%

FTSE 100 - Risers

Ashtead Group (AHT) 1,385.00p 11.51%
Fresnillo (FRES) 1,771.00p 10.69%
Antofagasta (ANTO) 641.50p 8.91%
Shire Plc (SHP) 4,897.00p 8.29%
Rio Tinto (RIO) 3,068.50p 6.84%
Glencore (GLEN) 270.25p 6.84%
BAE Systems (BA.) 585.00p 6.75%
Hikma Pharmaceuticals (HIK) 1,764.00p 6.07%
CRH (CRH) 2,810.00p 6.04%
Wolseley (WOS) 4,540.00p 5.75%

FTSE 100 - Fallers

Sainsbury (J) (SBRY) 238.70p -6.58%
Experian (EXPN) 1,467.00p -3.30%
SSE (SSE) 1,527.00p -3.17%
DCC (DCC) 6,190.00p -2.44%
WPP (WPP) 1,685.00p -2.43%
Associated British Foods (ABF) 2,573.00p -2.28%
Relx plc (REL) 1,373.00p -2.14%
Imperial Brands (IMB) 3,610.50p -2.13%
Unilever (ULVR) 3,311.00p -2.10%
British American Tobacco (BATS) 4,480.00p -2.10%

FTSE 250 - Risers

Hill & Smith Holdings (HILS) 1,158.00p 8.73%
Worldwide Healthcare Trust (WWH) 2,114.00p 8.24%
Weir Group (WEIR) 1,725.00p 7.88%
Balfour Beatty (BBY) 281.30p 7.33%
Kaz Minerals (KAZ) 318.60p 7.09%
Evraz (EVR) 222.40p 6.72%
Cobham (COB) 157.60p 6.49%
Centamin (DI) (CEY) 164.30p 6.34%
Hochschild Mining (HOC) 280.30p 6.17%
Elementis (ELM) 250.30p 6.15%

FTSE 250 - Fallers

Tate & Lyle (TATE) 659.00p -11.90%
International Personal Finance (IPF) 278.80p -4.98%
Aveva Group (AVV) 1,698.00p -4.34%
Smurfit Kappa Group (SKG) 1,738.00p -4.08%
Inmarsat (ISAT) 761.00p -3.79%
Laird (LRD) 130.30p -3.77%
DFS Furniture (DFS) 225.80p -3.55%
Templeton Emerging Markets Inv Trust (TEM) 590.00p -2.80%
Euromoney Institutional Investor (ERM) 1,038.00p -2.54%
JPMorgan Emerging Markets Inv Trust (JMG) 721.50p -2.24%