A surge for London-listed companies brought European stock markets within striking distance of an all-time high on Friday as investors cheered the likelihood of an orderly Brexit after a landslide election victory for British Prime Minister Boris Johnson.
The UK-focused FTSE mid-cap index jumped 5 percent to a record high, pushing the broader pan-European STOXX 600 up 1.1 percent to 412 points, up 1.1 percent for the week.
The blue-chip FTSE 100 also advanced on Friday as solid gains in banks and utilities helped the export-heavy index shrug off the impact of a surge in sterling, which typically weakens sentiment toward component companies.
Dublin’s ISEQ, also considered a barometer of Brexit sentiment, jumped to a 12-year high.
Markets believe a Conservative Party win would enable Johnson to deliver Brexit within weeks, easing fears that the UK could crash out and ending three-and-a-half years of uncertainty over the shape of the country’s exit from the trading bloc.
“The big issue has been the lack of direction and that goes away, which is why sterling is rallying and Gilt yields are back up and domestically focused equities are gaining,” said Gaurav Saroliya, director of global macro strategy at Oxford Economics.
The benchmark European index is just two points shy of a record high hit in 2015.
It is also on track to end the year almost 20 percent higher, its biggest annual gain in a decade, as investors turn optimistic about another major economic issue — the prolonged US-China trade dispute.
Trade-sensitive German shares jumped 1.3 percent on Friday after the US agreed to suspend a new round of Chinese tariffs in return for Beijing buying more US farm goods.
All major country indices were trading higher.
The European travel and leisure index rose, boosted by a 7.5 to 9 percent surge for Brexit-sensitive airline stocks such as EasyJet PLC, International Consolidated Airlines Group and Ryanair Holdings PLC.
Delivery Hero SE gained more than 23 percent as it agreed to buy South Korea’s top food delivery app operator Woowa Brothers for US$4 billion and form a joint venture.
German consumer goods company Henkel AG & Co slipped 3.67 percent as the consumer goods company said it expects its earnings before interest and taxes margin to fall to 15 percent next year.
Taiwan’s exports soared 56 percent year-on-year to an all-time high of US$64.05 billion last month, propelled by surging global demand for artificial intelligence (AI), high-performance computing and cloud service infrastructure, the Ministry of Finance said yesterday. Department of Statistics Director-General Beatrice Tsai (蔡美娜) called the figure an unexpected upside surprise, citing a wave of technology orders from overseas customers alongside the usual year-end shopping season for technology products. Growth is likely to remain strong this month, she said, projecting a 40 percent to 45 percent expansion on an annual basis. The outperformance could prompt the Directorate-General of Budget, Accounting and
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Netflix on Friday faced fierce criticism over its blockbuster deal to acquire Warner Bros Discovery. The streaming giant is already viewed as a pariah in some Hollywood circles, largely due to its reluctance to release content in theaters and its disruption of traditional industry practices. As Netflix emerged as the likely winning bidder for Warner Bros — the studio behind Casablanca, the Harry Potter movies and Friends — Hollywood’s elite launched an aggressive campaign against the acquisition. Titanic director James Cameron called the buyout a “disaster,” while a group of prominent producers are lobbying US Congress to oppose the deal,
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