Equity strategists at Citi said the U.K. election result “is probably as good as it gets.” While Conservatives had led in polls since the election was called, it wasn’t clear beforehand that they would win a majority in Parliament. Read more about the election.
The FTSE 250 MCX, +4.18% climbed 3.9% to 21609.70. Investment managers, real estate investment trusts and home builders led the way as investors flocked to stocks more exposed to the domestic economy. Double-digit gainers included lender Virgin Money UK VMUK, +15.01%, construction product supplier SIG SHI, +3.11% and electronics retailer Dixons Carphone DC, +7.96% .The surge in the pound GBPUSD, +1.6940% was a drag from companies that generate most of their revenue outside the U.K.
Large-cap advancers included home builders Persimmon PSN, +11.14%, Taylor Wimpey TW, +13.24%, Berkeley Group BKG, +9.44% and Barratt Developments BDEV, +9.36%. U.K. banks Royal Bank of Scotland RBS, +10.76% and Lloyds Banking Group LLOY, +6.38% also surged. The yield on the benchmark 10-year gilt TMBMKGB-10Y, +3.89% rose 5 basis points to 0.86%. Prices move in the opposite direction to yields.
Steve Goldstein Steve Goldstein is MarketWatch markets editor for Europe. Follow him on Twitter: @MKTWgoldstein.
The establishment is happy.