Fri City brief: Traders’ joy at Tory win
Investors welcomed news that the Conservative Party would remain in power for a second term and with an outright majority, removing the uncertainty of a hung parliament.
The FTSE 100 closed up 2.32% at 7,046.82, with banks, utility stocks and housebuilders providing the biggest support as they escaped limiting measures that Labour would have introduced.
Lloyds Banking Group, Royal Bank of Scotland and Barclays ended sharply higher. Labour had threatened to break up the banks and potentially hit them with a one-off bonus tax and a higher bank levy.
Shares in utilities Centrica and SSE also ended in the black as the risk of energy price caps by Labour fell away.
Housebuilders enjoyed a solid performance, with Barratt Developments, Persimmon and Taylor Wimpey all closing up as the Tory election victory removed the threat of rent caps and the controversial Mansion Tax.
Data from the US was also positive, showing employers added 223,000 jobs in April compared with a consensus forecast for an increase of 220,000, while the unemployment rate was bang in line with estimates, falling to 5.4% last month from 5.5% in March.
Shares in engineering firm Rolls-Royce were bought as the company maintained its full-year guidance for 2015, although it warned that revenue could take a £350m hit as a result of unfavourable currency rates.