Business Insight

FTSE lifted by political stability in France

French President Emmanuel Macron is seated in the cockpit of an Airbus A400M turboprop transport plane before taking off from Villacoublay military airbase near Paris, yesterday. Mr Macron landed at the Bourget airfield in an Airbus A400-M military transport plane to launch the aviation showcase. News that Mr Macron's party took the majority of the seats in the French assembly was welcomed by traders, as it represents political stability in one of the biggest countries of the EU PICTURE: Michel Euler/AP
Kalyeena Makortoff

THE FTSE 100 followed European equities higher, as the success of President Emmanuel Macron's party in the French legislative elections convinced investors of growing political stability on the continent.

London's blue chip index ended the day higher by 0.8 per cent or 60.27 points at 7,523, while its European peers including the French Cac 40 and German Dax rose by 0.9 per cent and one per cent, respectively.

David Madden, a market analyst at CMC Markets UK, said: "News that Mr Macron's party took the majority of the seats in the French assembly was welcomed by traders, as it represents political stability in one of the biggest countries of the EU.

"France's economy didn't fare too well under Francois Hollande, and investors are optimistic about the new French leader."

Investors were also keeping an eye on the Brexit negotiations, which kicked off on yesterday with the UK's Brexit secretary David Davis meeting the European Commission's chief negotiator Michel Barnier in Brussels.

"David Davis was hopeful going into the Brexit talks today, and seeing as himself and Michel Barnier exchanged gifts at their meeting, it would appear that the talks started off on the right foot," Mr Madden said yesterday.

Sterling weakness also buoyed the FTSE 100, as listed multinational firms tend to benefit when earnings in foreign currencies are stronger.

The pound was down 0.3 per cent versus the US dollar at 1.273, but was flat against the euro at 1.141.

In oil markets, Brent crude prices edged higher by 0.2 per cent to US$47.38 US per barrel (£37.20), despite continued concerns about oversupply in the global market, raising concerns about how long the upturn will last.

In UK stocks, Sainsbury shares were one of the best performers on the FTSE 100, rising 5.7p to 258p after reports emerged the supermarket has tabled a £130 million bid to acquire convenience store operator Nisa.

Standard Life shares climbed 9.3p to 398.6p, while shares in Aberdeen Asset Management jumped 14.3p to 299.7p, after shareholders overwhelmingly backed an £11 billion tie-up between the two financial services firms at general meetings yesterday.

Ocado shares were the biggest riser on the FTSE 250, soaring 30.6p to 306.4. It comes after Ocado was handed a broker upgrade from Exane on the prospect of the online grocer striking a partnership deal with Amazon, following the retail giant's own swoop for Whole Foods.

Bonmarche shares fell 0.25p to 96.25p after reporting a 39.4 per cent drop in annual pre-tax profits to £5.8m, as a combination of Brexit pressures and unseasonal weather weighed on the womenswear retailer.

The biggest risers on the FTSE 100 were Glencore up 8.2p to 287.95p, Wolseley up 119p to 4,884p, Standard Life up 9.3p to 398.6p, and Sainsbury up 5.7p to 258p.

The biggest fallers on the FTSE 100 were Hammerson, down 8p at 594p, Hikma Pharmaceuticals, down 19p to 1,624p, Paddy Power Betfair, down 95p to 8,525p, and Pearson, down 7.5p to 705.5p.

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