London midday: Stocks rally as Trump becomes 47th US president

London stocks were still firmly in the black by midday on Wednesday as Donald Trump was elected the 47th president of the United States.

The FTSE 100 was up 1.3% at 8,276.35.

Russ Mould, investment director at AJ Bell, said: "The dollar strengthened and 10-year Treasury yields jumped to 4.406% on the assumption that Trump’s policies will stoke inflation and require interest rates to stay higher for longer. That sustained the rally in US Treasuries which has been in motion since mid-September when they traded at 3.623%.

"Trump’s desire to cut taxes and make things easier for businesses to operate should in theory give a near-term tailwind to US shares, with futures prices implying a strong opening to Wall Street later. The S&P 500 is indicated to open 2% ahead and the Nasdaq up 1.7%.

"The impact of higher inflation on corporate profit margins, and how interest rates might not come down as fast as previously expected, are real risks for investors to consider once the dust settles.

"The FTSE 100 jumped 1.5% in early trading, led by a mixture of industrial, financial and pharmaceutical companies."

On home shores, a survey showed that activity in the construction sector expanded for the eighth straight month in October, though growth eased from a two-year high as uncertainty delayed spending decisions ahead of the Autumn Budget.

The purchasing managers' index for the construction sector, released monthly by the Chartered Institute of Procurement & Supply (CIPS) and S&P Global, fell to 54.3 last month from 57.2 in September - its highest rate of growth since April 2022.

The sector has been growing since March - indicated by any reading above 50 - but October's reading was well below the consensus estimate of 56.0.

Overall new work increased at a "solid pace" during the month, according to S&P Global, though political uncertainty and subdued household demand due to cost-of-living pressures were said to have kept a lid on growth.

In equity markets, building materials group CRH and equipment rental firm Ashtead, both of which have significant exposure to the US, were the top gainers on the FTSE 100.

Russ Mould said Ashtead shares were racing ahead "on the prospect of more building work created by Trump’s desire to drive the US economy including greater manufacturing and construction work".

He added: "As a hirer of construction equipment, it is a direct play on hammers and tools pounding away across the country."

Marks & Spencer jumped as it reported better-than-expected first-half profits as it said the food and clothing segments have now delivered market share growth for four consecutive years. In the 26 weeks to 28 September, profit before tax and adjusting items rose 17.2% to £407.8m, coming in ahead of consensus expectations of £361m. Pre-tax profit was up 20.4% to £391.9m.

Lancashire Holdings gained as it said gross premiums written rose 9% in the first nine months of the year to $1.7bn and announced a special dividend of 75 cents per share.

OSB and Prudential also advanced after results, while Burberry was boosted by an upgrade to ‘outperform’ from ‘sector perform’ at RBC Capital Markets.

Pub chain JD Wetherspoon was higher after saying it was "confident of a reasonable outcome for the year" as it reported record sales but highlighted rising costs.

Ukraine-based iron ore pellet exporter Ferrexpo surged more than 20%.

Neil Wilson, chief market analyst at Finalto, said the stock is a "Ukraine peace play". Trump had said while campaigning that he would be able to end Russia's war in Ukraine in 24 hours.

On the downside, housebuilder Persimmon fell as it said housing completions dipped slightly in the third quarter and warned of rising building costs heading into 2025.

Smith & Nephew was knocked lower by a downgrade to ‘hold’ at Berenberg.

Market Movers

FTSE 100 (UKX) 8,276.35 1.27%
FTSE 250 (MCX) 20,666.80 1.46%
techMARK (TASX) 4,636.93 1.60%

FTSE 100 - Risers

CRH (CDI) (CRH) 7,888.00p 6.65%
Ashtead Group (AHT) 6,344.00p 6.30%
Marks & Spencer Group (MKS) 404.90p 5.58%
Barclays (BARC) 257.05p 4.96%
BAE Systems (BA.) 1,343.00p 4.92%
InterContinental Hotels Group (IHG) 8,966.00p 4.82%
Intermediate Capital Group (ICG) 2,212.00p 4.73%
Rolls-Royce Holdings (RR.) 585.60p 4.57%
Halma (HLMA) 2,631.00p 4.49%
Pershing Square Holdings Ltd NPV (PSH) 3,610.00p 4.46%

FTSE 100 - Fallers

Persimmon (PSN) 1,392.50p -5.34%
Smith & Nephew (SN.) 937.40p -2.98%
Intertek Group (ITRK) 4,630.00p -2.36%
Fresnillo (FRES) 712.50p -2.06%
BT Group (BT.A) 145.20p -1.49%
Severn Trent (SVT) 2,615.00p -1.25%
British Land Company (BLND) 392.60p -1.01%
United Utilities Group (UU.) 1,049.00p -0.99%
Barratt Redrow (BTRW) 445.00p -0.85%
Vistry Group (VTY) 878.00p -0.79%

FTSE 250 - Risers

Lancashire Holdings Limited (LRE) 683.00p 8.59%
OSB Group (OSB) 371.60p 7.34%
Watches of Switzerland Group (WOSG) 431.80p 5.42%
Baillie Gifford US Growth Trust (USA) 232.00p 5.22%
JPMorgan American Inv Trust (JAM) 1,060.00p 5.16%
4Imprint Group (FOUR) 5,350.00p 5.11%
Carnival (CCL) 1,635.50p 4.94%
Bank of Georgia Group (BGEO) 4,585.00p 4.92%
TBC Bank Group (TBCG) 2,980.00p 4.75%
Babcock International Group (BAB) 491.00p 4.47%

FTSE 250 - Fallers

Fidelity China Special Situations (FCSS) 214.00p -2.28%
BH Macro Ltd. GBP Shares (BHMG) 375.00p -1.96%
Just Group (JUST) 133.40p -1.62%
Aston Martin Lagonda Global Holdings (AML) 118.80p -1.49%
Harbour Energy (HBR) 269.70p -1.17%
Hochschild Mining (HOC) 233.50p -1.06%
Ashmore Group (ASHM) 214.00p -0.83%
Patria Private Equity Trust (PPET) 521.00p -0.76%
Derwent London (DLN) 2,116.00p -0.75%
Tritax Big Box Reit (BBOX) 137.50p -0.72%