FTSE flashes green, Smith & Nephew gains as Brits head to the polls (2024)

Stock prices in London were higher at midday Thursday, as voters continue to turn out at poll stations to deliver what is expected to be a general election victory for the Labour party for the first time since 2005.

The FTSE 100 index was up 66.66 points, or 0.8%, at 8,237.46. The FTSE 250 was up 41.98 points, or 0.2%, at 20,571.24, and the AIM All-Share was up 0.67 points, or 0.1%, at 770.79.

The Cboe UK 100 was up 0.8% at 820.01, the Cboe UK 250 was up 0.5% at 17,926.43, and the Cboe Small Companies was up 0.2% at 16,978.97.

Focus at midday was firmly on the UK general election, for which pollsters have predicted a Labour majority for the first time in 14 years.

In a last minute blow to the Tory party on Wednesday, Labour has received the backing of tabloid, The Sun, which dubbed the Conservatives a ‘divided rabble, more interested in fighting themselves than running the country’.

‘The two most likely scenarios are a good Labour majority with 150 seats – which is almost double Boris Johnson’s 80-seat majority in 2019 - or a supermajority. Both will give the Labour a very large margin to pass whatever reforms they want to pass in the coming years,’ said Ipek Ozkardeskaya at Swissquote Bank.

‘Normally, investors prefer Conservatives as they have a better grip on spending and debt levels. But this time, even investors want to see Labour take over the reins. For Wall Street, a Labour win is positive for both the UK stocks and sterling. Small and medium-sized British stocks will likely benefit more from a Labour win than the FTSE 100 – which is mostly exposed to the global market conditions.’

In European equities on Thursday, the CAC 40 in Paris was up 0.7%, while the DAX 40 in Frankfurt was up 0.3%.

Major stocks in Europe were in the green at midday, even after data showed a contraction in eurozone construction activity in May.

The HCOB eurozone construction PMI total activity index edged down to 41.8 in June from 42.9 in May. Falling further from the 50-mark separating growth from contraction, it indicates that the slowdown in activity has accelerated.

In Germany, the construction PMI total activity index improved to 39.7 in June from 38.5 in May, marking the mildest slowdown in activity in 10 months. Expectations remained pessimistic but improved to a 28-month high.

In France meanwhile, construction activity fell at the sharpest rate in three months. The HCOB France construction PMI total activity index declined to 41.0 in June from 43.4 in May.

Locally, the UK’s construction activity saw growth in June, but at a slower rate than in the prior month.

The headline S&P Global UK construction purchasing managers’ index registered 52.2 points in June, down from 54.7 points in May. This was below market consensus, with FXStreet pencilling in a fall to just 53.6.

Remaining above the 50.0 no-change mark for the fourth consecutive month, the latest reading signalled a sustained improvement in overall construction activity in the UK, albeit with the pace of growth softening from the previous month.

S&P explained that the main driver in growth continued to come from commercial activity. The only category to record a drop in activity was housing, where output fell ‘solidly’, S&P added.

The pound was quoted at $1.2758 at midday on Thursday in London, slightly lower compared to $1.2768 at the equities close on Wednesday. The euro stood at $1.0799, against $1.0806. Against the yen, the dollar was trading at JP¥161.11, down compared to JP¥161.38.

On the FTSE 100, Smith & Nephew gained 7.9%.

Shares in the London-based medical technology company got a boost on Thursday, after activist investor Cevian Capital II GP took a stake in the firm. Cevian, which holds its headquarters in Stockholm, has acquired a 5.02% stake in Smith & Nephew.

Elsewhere on the index, Barclays gained 1.4%.

The London-based lender has agreed to sell its German consumer finance operation, Consumer Bank Europe, to a subsidiary of the Vienna-based financial firm, Bawag Group, as part of its strategic overhaul.

The bank didn’t disclose financial details of the transaction, but said Bawag will pay a small premium to net assets, payable in cash on completion. As at March 31, Consumer Bank Europe had gross assets of €4.7 billion, primarily comprising card and loan receivables, Barclays said.

On the FTSE 250, Spectris gained 1.8%.

The London-based supplier of high-tech instruments, test equipment and software for industrial applications announced on Thursday that it will buy SciAps for up to $260 million. The acquisition comprises an upfront cost payment of $200 million and a deferred payment of up to $60 million.

Based in Boston, Massachusetts, SciAps is a provider of handheld instruments leveraging X-ray fluorescence and laser induced breakdown spectroscopy techniques for materials analysis.

Spectris Chief Executive Officer Andrew Heath said: ‘SciAps is an excellent business and a great addition to Spectris Scientific, bringing complementary technology and strengthening our offering, including our innovative digital solutions. The acquisition will strengthen Spectris’ position in a number of key end markets benefiting from long-term, secular and sustainability growth trends, as well as accelerating sales of SciAps and Malvern Panalytical’s offerings through each other’s sales and distribution channels.’

On London’s AIM, Distribution Finance jumped 24%.

The Manchester, England-based specialist bank said it expects full year results to be significantly ahead of market expectations.

CEO Carl D’Ammassa commented: ‘2024 has started exceptionally well, with strong operational and commercial execution as well as portfolio management and control. Our products and services clearly resonate with our customers and seeing continued record new loan origination is a testament to the entire team’s focus on providing high quality service and the deep relationships we have with our dealer and manufacturer partners.’

In the US on Wednesday, Wall Street ended mixed, with the Dow Jones Industrial Average down 0.1%, the S&P 500 up 0.5% and the Nasdaq Composite up 0.9%. It was another record close for the S&P and Nasdaq.

Brent oil was quoted at $86.96 a barrel at midday in London on Thursday, up from $86.33 late Wednesday. Gold was quoted at $2,358.00 an ounce, lower against $2,361.74.

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Issue Date: 04 Jul 2024

FTSE flashes green, Smith & Nephew gains as Brits head to the polls (2024)
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