London open: FTSE down but not out as Trump wins presidency

The dollar sank against the Japanese yen and gold rallied on Wednesday as investors fled to safety after Donald Trump was elected president of the United States, but losses on the FTSE 100 were nowhere near as heavy as expected thanks in part to strength in the pharmaceutical sector.

At 0830 GMT, the FTSE 100 was down 0.8% to 6,791.66, already recovering from much sharper falls at the open, with pharma stocks GlaxoSmithKline, AstraZeneca and Shire helping to limit losses.

A win for Clinton had been considered bad for the sector as she had made it clear she wanted to increase regulation and combat high drug prices.

The pound was not a strong as had been expected in the event of a Trump win, up just 0.2% versus the dollar at 1.2401, but the greenback crashed 1.4% lower against the yen to 103.66. At the same time, the Mexcian peso plunged to an all-time low against the dollar.

Meanwhile, gold prices enjoyed their biggest rally since Brexit as the 'risk off' mode took over and investors scurried for safety.

Oil prices retreated, with West Texas Intermediate down 1.4% to $44.37 a barrel and Brent crude down 1.2% to $45.50.

Analysts Mike van Dulken and Henry Croft at Accendo Markets said: “A negative open is not exactly unexpected given the US election result reviving Brexit memories. However, futures prices well off their overnight lows suggests far less panic than on June 24, investors perhaps welcoming the opportunity to move on from this period of electoral uncertainty, now ready to deal with a pro-Business Trump.

“Less chance of a US Fed rate hike also helps keep investors smiling at the prospect of cheap money and accommodative global monetary policy stance for a while longer.”

Although investors are generally uneasy about the lack of any specifics details underlying some of Trump’s proposals, it seemed as though his acceptance speech may have calmed some nerves.

Tony Cross, market analyst for TopTradr, said: “There are suggestions that he may be an ‘easier’ statesperson for overseas nations to work with than Hillary Clinton, but the entire election campaign was light on definitive policy details. This still has some distance to run but again it’s notable that USD/JPY has recovered around half of its overnight losses already.”

In corporate news, Sainsbury's was sharply lower 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.

Burberry was also under the cosh after it said half-year revenues and profit decreased as the luxury fashion house implemented a turnaround plan to cut costs and revamp its products.

Global information services company Experian slumped 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.

Rio Tinto edged lower after it suspended a top executive, while another stepped down amid a payments probe.

Market Movers

FTSE 100 (UKX) 6,821.58 -0.31%
FTSE 250 (MCX) 17,329.09 -0.68%
techMARK (TASX) 3,329.57 0.88%

FTSE 100 - Risers

Fresnillo (FRES) 1,768.00p 10.50%
Hikma Pharmaceuticals (HIK) 1,779.00p 6.98%
Randgold Resources Ltd. (RRS) 7,185.00p 6.05%
Polymetal International (POLY) 960.00p 5.79%
Shire Plc (SHP) 4,757.50p 5.21%
Antofagasta (ANTO) 618.50p 5.01%
AstraZeneca (AZN) 4,634.50p 4.13%
BAE Systems (BA.) 569.00p 3.83%
Ashtead Group (AHT) 1,289.00p 3.78%
GlaxoSmithKline (GSK) 1,604.00p 3.02%

FTSE 100 - Fallers

Experian (EXPN) 1,443.00p -4.88%
Standard Life (SL.) 333.00p -2.60%
International Consolidated Airlines Group SA (CDI) (IAG) 430.10p -2.43%
Marks & Spencer Group (MKS) 323.30p -2.33%
Burberry Group (BRBY) 1,447.00p -2.30%
Micro Focus International (MCRO) 2,022.00p -2.08%
DCC (DCC) 6,220.00p -1.97%
Aviva (AV.) 421.70p -1.93%
Intu Properties (INTU) 267.90p -1.83%
Prudential (PRU) 1,329.00p -1.77%

FTSE 250 - Risers

Acacia Mining (ACA) 566.00p 9.27%
Centamin (DI) (CEY) 167.50p 8.41%
Indivior (INDV) 375.00p 7.02%
Hochschild Mining (HOC) 281.40p 6.59%
AO World (AO.) 165.50p 4.09%
BTG (BTG) 657.00p 3.63%
Elementis (ELM) 243.10p 3.10%
Pennon Group (PNN) 830.00p 2.60%
Vedanta Resources (VED) 758.50p 2.15%
Petra Diamonds Ltd.(DI) (PDL) 151.40p 1.75%

FTSE 250 - Fallers

Sophos Group (SOPH) 213.70p -8.28%
International Personal Finance (IPF) 277.50p -5.42%
Countryside Properties (CSP) 223.70p -4.97%
Caledonia Investments (CLDN) 2,324.00p -3.89%
Tate & Lyle (TATE) 719.00p -3.88%
Smurfit Kappa Group (SKG) 1,746.00p -3.64%
Monks Inv Trust (MNKS) 503.50p -3.54%
Laird (LRD) 130.70p -3.47%
Fidelity China Special Situations (FCSS) 178.80p -3.40%
Countrywide (CWD) 183.20p -3.12%