London close: Stocks up as Brits face another Tory leadership race

London stocks managed a positive finish on Thursday amid political chaos, as the Conservative Party prepared for yet another leadership election after Liz Truss resigned, becoming the shortest-serving prime minister in UK history.

The FTSE 100 ended the session up 0.27% at 6,943.91, and the FTSE 250 was 0.82% firmer at 17,388.93.

Sterling was in a mixed state, last trading 0.311% stronger on the dollar at $1.1254, while it weakened 0.01% against the euro to change hands at €1.1479.

“Liz Truss’ now becomes Britain’s shortest serving PM, but sterling seems content as, ironically, it likely cements Jeremy Hunt’s position as chancellor,” said IG chief market analyst Chris Beauchamp.

“Even the apparent resurrection of Boris as a political figure hasn’t unnerved markets particularly, since the fiscal plan is likely to remain in place as the government - whoever leads it- looks determined to repair Britain’s shaky position in the eyes of financial markets.

“Prime minister Liz Truss resigned just after lunchtime, caving in to days of pressure as her 44-day-old premiership imploded in a debris field of policy u-turns, sackings and financial market collapses.”

After yet another day of unbelievable turmoil that saw hard-right interior minister Suella Braverman sacked and MPs allegedly manhandled in parliament during a manifesto-breaking vote on fracking, Truss decided to step down after meeting with Sir Graham Brady, head of the Conservative party's powerful 1922 Committee representing backbench lawmakers.

Truss said she had spoken to King Charles and said she was quitting as leader of the Tory party and that a leadership election would now take place.

There was, however, a growing call for a general election to be called, not least from the opposition Labour Party.

Business groups reacted with fury at the prospect of the third prime minister in three months, with Tony Danker, director-general of the Confederation of British Industry saying the events of recent weeks had "undermined the confidence of people, businesses, markets and global investors in Britain".

"That must now come to an end if we are to avoid yet more harm to households and firms.

"Stability is key - the next Prime Minister will need to act to restore confidence from day one."

Truss said she had entered office with “a vision for a low-tax, high-growth economy that would take advantage of the freedoms of Brexit”.

"I recognise that, given the situation, I cannot deliver the mandate on which I was elected by the Conservative party,” she said outside Downing Street before 1400 BST.

“I have therefore spoken to His Majesty the King to notify him that I am resigning as leader of the Conservative party.”

The state of infighting and chaos surrounding the Truss administration got so ridiculous that one UK newspaper established a live feed of a lettuce to see whether it or the prime minister would last longer - with the vegetable winning comfortably.

In economic news from across the pond, Americans lined up for first-time unemployment benefits at a decelerated pace in the week ended 15 October, according to the Department of Labor.

New unemployment claims dropped by 12,000 to 214,000, well below market expectations for a print of 230,000, halting forecasts for a loosening labour market.

On a non-seasonally adjusted basis, initial claims fell by 20,003 to 178,369, while the four-week moving average, which aims to strip out week-to-week volatility, rose by 1,250 to 212,250.

Staying stateside, second-hand home sales in the US slipped last month, weighed down by fast-rising mortgage rates, led by declines in America’s more expensive regions.

According to the National Association of Realtors, in seasonally adjusted terms, existing home sales shrank at a month-on-month clip of 1.5% to reach an annualised pace of 4.71m.

Economists had pencilled in a reading of 4.7m.

On London’s equity markets, housebuilder Berkeley Group closed down 0.47% after a downgrade to ‘hold’ at Deutsche Bank.

The bank said in a note that the housing market was in a state of flux, adding that mortgage rates had tripled, loans were less available, and future refinancings would be painful.

Dechra Pharmaceuticals fell 0.69% after it said it remained on course to meet full-year expectations, despite a slower start to the year.

Homewares retailer Dunelm Group was 1.8% weaker after it reported a fall in first-quarter sales and maintained annual guidance despite a challenging macroeconomic environment.

Bunzl slid 2.09% despite saying that third-quarter revenue rose 18.8% at actual exchange rates and 8.7% at constant exchange rates.

On the upside, polymer maker Synthomer jumped 5.77% after saying it had agreed a relaxation of loan covenants with its banks to provide it increased headroom through to the end of next year.

Luxury fashion brand Burberry Group ticked up 1.13% following well-received results from French peer Hermes.

NatWest Group added 3.25% after saying it had entered into a strategic partnership with the Vodeno Group to create a banking-as-a-service business in the UK.

Anglo American reversed earlier losses to close up 0.87%, after it signed a memorandum of understanding with Thyssenkrupp Steel to collaborate on developing new ways to decarbonise steelmaking.

Jupiter Fund Management leapt 10.08% after it said that net outflows slowed in its third quarter to £0.6bn.

The FTSE 250 company said net inflows from institutional clients totalled £0.5bn in the three months ended 30 September, driven by a large mandate from a sovereign wealth fund.

Gold miner Centamin added 6.82% after it said third-quarter revenues had risen on the back of higher production throughout the period, supporting the firm's full-year guidance.

It said revenues rose 19% to $218.1m in the three months ended 30 September, with other group selling 126,610 ounces of gold throughout the period - a 22% year-on-year improvement.

Reporting by Josh White at Sharecast.com. Additional reporting by Michele Maatouk, Frank Prenesti and Alexander Bueso.

Market Movers

FTSE 100 (UKX) 6,943.91 0.27%
FTSE 250 (MCX) 17,388.93 0.82%
techMARK (TASX) 4,126.20 -0.28%

FTSE 100 - Risers

Fresnillo (FRES) 713.60p 3.96%
Lloyds Banking Group (LLOY) 42.00p 3.53%
Endeavour Mining (EDV) 1,512.00p 3.49%
Ocado Group (OCDO) 493.90p 3.33%
Land Securities Group (LAND) 531.80p 3.14%
Antofagasta (ANTO) 1,117.00p 2.99%
Rightmove (RMV) 473.10p 2.80%
SEGRO (SGRO) 733.00p 2.80%
Barratt Developments (BDEV) 353.10p 2.61%
Harbour Energy (HBR) 381.30p 2.56%

FTSE 100 - Fallers

Vodafone Group (VOD) 98.72p -2.41%
Bunzl (BNZL) 2,720.00p -2.09%
BT Group (BT.A) 125.45p -1.76%
Coca-Cola HBC AG (CDI) (CCH) 1,926.50p -1.68%
International Consolidated Airlines Group SA (CDI) (IAG) 115.20p -1.68%
Smiths Group (SMIN) 1,509.50p -1.57%
AstraZeneca (AZN) 9,656.00p -1.56%
Diageo (DGE) 3,609.00p -1.43%
United Utilities Group (UU.) 886.80p -1.34%
GSK (GSK) 1,365.00p -1.24%

FTSE 250 - Risers

Jupiter Fund Management (JUP) 97.15p 10.08%
Darktrace (DARK) 365.50p 8.62%
Wood Group (John) (WG.) 125.40p 7.18%
Centamin (DI) (CEY) 88.66p 6.82%
Network International Holdings (NETW) 322.60p 6.11%
Synthomer (SYNT) 99.00p 5.77%
W.A.G Payment Solutions (WPS) 86.10p 5.75%
CLS Holdings (CLI) 139.20p 4.98%
Jlen Environmental Assets Group Limited NPV (JLEN) 115.20p 4.73%
Greencoat UK Wind (UKW) 144.50p 4.48%

FTSE 250 - Fallers

ITV (ITV) 64.84p -4.20%
Liontrust Asset Management (LIO) 782.00p -4.05%
Coats Group (COA) 57.60p -4.00%
PZ Cussons (PZC) 186.80p -2.71%
ASOS (ASC) 537.00p -2.36%
Molten Ventures (GROW) 258.00p -2.27%
Drax Group (DRX) 487.40p -2.21%
Ascential (ASCL) 195.00p -1.96%
RHI Magnesita N.V. (DI) (RHIM) 1,677.00p -1.93%
Telecom Plus (TEP) 1,982.00p -1.93%