December 7, 2022

UK stocks climb after Prime Minister Boris Johnson announces his resignation

Signage is seen outside the entrance to the London Stock Exchange in London, Britain. August 23, 2018. REUTERS/Peter Nicholls

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  • Pound rallies to session high
  • Shell increases the value of its oil and gas assets
  • FTSE 100 up 1.2%, FTSE 250 up 0.9%

July 7 (Reuters) – British stocks soared, with the domestically focused FTSE 250 index hitting a session high, after media reports that Boris Johnson would announce his resignation as British prime minister on Thursday.

The FTSE 100 (.FTSE), which tends to benefit from a weaker pound, gained 1.2% at 08:25 GMT.

Meanwhile, the FTSE 250 midcap index (.FTMC), which is more exposed to the domestic economy, climbed 0.9% to hit an intraday high. The pound jumped 0.5% on media reports. Read more

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The currency hit a two-year low against the dollar on Wednesday after the resignation of senior ministers who had left the government dangerously close to paralysis. Read more

“It’s a case of buying the rumour, selling the fact,” said David Madden, market analyst at Equiti Capital.

“The pound has fallen so much on the rumblings of a resignation. I think the markets have already priced in a change in government, and that should pave the way for some medium-term stability.”

Worries over economic growth and soaring inflation continued to dominate the mood of the global market, with investors now looking to earnings season for signs of how companies are faring on costs and headwinds. weakening consumer confidence.

Persimmon (PSN.L) fell 5.3% after Britain’s second-largest homebuilder said the number of homes delivered in the first half fell short of expectations. Read more

The broader housing index (.FTNMX402020) fell 2.1% even as mortgage lender Halifax said house prices in Britain jumped 13%, the most since 2004 in the past 12 month ending in June. The index is near its lowest level since October 2014. read more

Oil and gas stocks gave the FTSE 100 the biggest boost, with Shell (SHEL.L) up 1.2% after the oil major said it would write off up to 4.5 billion dollars in write-downs on oil and gas assets. Read more

Entain (ENT.L), which owns betting companies Ladbrokes and Coral, fell 5.6% after forecasting online gaming revenue will remain flat this year, weighed down by lower customer spending. Read more

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Reporting by Sruthi Shankar in Bengaluru; Editing by Shounak Dasgupta

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