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FTSE 100 makes a strong start as prospect of Biden presidency quells nerves; Taylor Wimpey lifts bui

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The FTSE 100 opened firmly in positive territory with Europe’s major markets pricing in a Biden presidency.

The networks in the US have already called the election for the former vice president, and the markets appear to have written off the chances of success for legal action threatened by the current Whitehouse incumbent.

The relief for the markets at least is the Republicans held onto the Senate, meaning proposed tax hikes are unlikely to go through.

Rather, the early focus for the new president looks set to be a second stimulus programme to lift the ailing US economy and the healing of international trade rifts, most notably with China.

“Despite the likelihood of the election result being contested, the fact that Congress will be divided is now being priced in, which is seen as a tailwind for markets since sweeping changes are more difficult to introduce,” said Richard Hunter, head of markets at Interactive Investor.

“In particular, previous concerns of higher taxes and less regulatory interference have subsided, while an early boost to the economy from further fiscal stimulus is seen to be on the immediate agenda.”

Moving early on here in the UK were the housebuilders, led by Taylor Wimpey (LON:TW.), up almost 12% after it upgraded its earnings guidance. Persimmon (LON:PSN), Barratt Developments (LON:BDEV) and Berkeley (LON:BKY) all received significant boosts to their share prices on the coat-tails of TW.

Among the tiddlers, med-tech group IQ-AI Ltd (LON:IQAI) continued its ascent, rising 20% to 17.4p on the back of a deal with the Mayo Clinic. A week ago, the shares were trading at 5p each and were changing hands for less than 2p in March.

6.34 am: Strong start predicted

The FTSE 100 looks set to get off to a strong start with the UK blue-chip pricing in strongly a Joe Biden presidency.

The US TV networks may have called the election for the former vice president, but Trump appears reluctant to vacate the Whitehouse and is threatening legal action on multiple fronts.

Traders are pricing in limited scope for success.

“With Mr Biden looking likely to extend his electoral college votes as the last states complete counts, it is a leap of faith that the Republicans will overturn results in multiple US states by the margins required,” said Jeffrey Halley, senior market analyst at OANDA.

A Biden presidency is likely to see a more conciliatory approach to international trade along with a concerted effort to get the rampant coronavirus outbreak under control.

With the Republicans retaining the Senate it appears unlikely his package of tax hikes will go through.

Rather, the early first focus for the new president looks set to be a second stimulus programme to lift the ailing US economy.

Last week’s non-farm payrolls numbers, which were better than expected, suggested the damage to the jobs market provided a small glimmer of hope the bloodletting in the jobs market was slowing.

Here in the UK it looks set to be another busy week for corporate news. Updates are expected from ITV (LON:ITV) and second-liners WH Smith (LON:WHS), JD Wetherspoon (LON:JDW) and Land Securities (LON:LAND).

On the market

  • Pound US$1.3176 (+0.15%)
  • Bitcoin US$15,404.59(+2.715)
  • Gold US$1,961.90 (+0.52%)
  • Brent crude US$40.48 (+2.61%)

6.45 am: Early Markets: Asia / Australia

Stocks in Asia-Pacific surged today as investors reacted to Joe Biden defeating Donald Trump in the US presidential race.

In Japan, the Nikkei 225 gained 2.12% while South Korea’s Kospi rose 1.25%.

Chinese stocks also surged with the Shanghai composite up 1.7% while Hong Kong’s Hang Seng index advanced 1.42%.

Australia’s S&P/ASX 200 joined other Asian markets in continuing the post-election stock rally by closing 1.75% higher.

READ OUR ASX REPORT HERE

Proactive Australia news:

Alkane Resources Limited (ASX:ALK) (OTCMKTS:ALKEF) (FRA:AK7) has significantly expanded mineralisation at its Boda prospect in Central West New South Wales after intersecting further extensive zones of gold-copper mineralisation.

Mako Gold Ltd (ASX:MKG) has received wide and high-grade intersections from drilling that support a large gold discovery at Tchaga prospect on the company’s 224 square kilometre Napié Gold Project in Côte d’Ivoire.

Sipa Resources Ltd (ASX:SRI) has completed a 1,545-metre reverse circulation (RC) drilling program at the Wolfe Basin Project in Western Australia’s Kimberley region, focusing on key targets highlighted by recent IP surveys.

Legend Mining Limited (ASX:LEG) assays of up to 24.7 metres at 1.35% nickel, 0.77% copper and 0.11% cobalt from 219.2 metres confirm visual observations of nickel-copper sulphide mineralisation at the Mawson prospect within Rockford Project in WA’s Fraser Range.

DomaCom Limited (ASX:DCL) has partnered with leading Australian community housing provider (CHP) BlueCHP Limited, to deliver up to $250 million in affordable housing for essential workers in 2021.

Zelira Therapeutics Ltd (ASX:ZLD) (OTCQB:ZLDAF) (FRA:G1G) has entered into an agreement with Emyria Ltd (ASX:EMD), to conduct an observational trial for patients diagnosed with autism spectrum disorder (ASD) treated with Zelira’s HOPE™ range of products.

Ramelius Resources Ltd (ASX:RMS) will expedite development of the Penny Gold Project near Mt Magnet in Western Australia after receiving positive feasibility study results.

Dart Mining NL (ASX:DTM) has started drilling copper-gold mineralisation targets at the wholly-owned Granite Flat project in northeast Victoria.

Bardoc Gold Ltd (ASX:BDC) is closing-in on development of its new long-life Bardoc Gold Project near Kalgoorlie following strong progress with development studies, an upgraded mineral resource and drilling success.

 

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