London’s FTSE 100 boosted by Truss trampled stocks regaining ground after Sunak victory
London’s FTSE 100 today was lifted by stocks that have suffered during the last month’s financial market turmoil regaining losses.
The capital’s premier index closed 0.64 per cent higher at 7,013.99 points, while the domestically-focused mid-cap FTSE 250 index, which is more aligned with the health of the UK economy, rose 0.76 per cent to 17,337.55 points.
Shares that were trampled by former prime minister Liz Truss’s £45bn tax cutting mini-budget on 23 September recovered some ground today after ex chancellor Rishi Sunak emerged as the winner of the Tory leadership race.
Sunak will today become the UK’s 57th prime minister and the third incumbent in Number 10 this year.
Banks and housing stocks had been battered by Truss’s mini-budget sparking turmoil on gilt markets.
House builders Persimmon, Barratt Developments and Berkeley all rose more than 3.7 per cent. Taylor Wimpey also closed up sharply.
High street lenders Lloyds Bank and Barclays added 2.79 per cent and 2.69 per cent respectively.
Soaring gilt yields forced banks to strip mortgages from the market and fuelled fears house prices could fall sharply in response to tighter financing conditions.
That bleak landscape forced banks and property stocks down steeply in the month since the mini-budget.
UK borrowing costs fell sharply after Sunak seized the keys to Number 10 following leadership contender Penny Mordaunt’s withdrawal.
Yields on the 10-year gilt dropped around 30 basis points. Yields and prices move inversely.