Stocks in companies that would have been dented by a Labour party win surged on Friday in the wake of prime minister Boris Johnson’s emphatic election victory.
While the FTSE 100 (^FTSE) made only modest gains, shares in UK banks, rail firms, the utilities sector, and the construction industry rose significantly.
Housebuilding firm Taylor Wimpey (TW.L) was one of the biggest gainers on the index, which tracks the UK’s top 100 companies. Shares in the company climbed by more than 10% on Friday, as did shares in estate agent Foxtons (FOXT.L) and Persimmon (PSN.L).
The property market, which has been mired in Brexit-related uncertainty for years, is thought to be one of the main beneficiaries of the Conservative party’s win.
The outcome of the election “removes several key risks that have been hanging over the UK stock market”, said Russ Mould, the investment director at AJ Bell, on Friday.
“It removes the threat of Labour trying to renationalise many sectors,” he said, noting that the absence of a hung parliament — which likely would have thwarted the UK’s exit from the European Union — was also boosting stocks.
The Labour party had set its sights on banks, railways, electricity distribution, the Royal Mail, water utilities and BT’s broadband division for nationalisation.
Shares in the Royal Mail Group (RMG.L) jumped by as much as 8% in early trading, before falling back slightly.
Banks also made huge gains. Virgin Money UK (VMUK.L), which focuses almost entirely on the UK domestic market, was the biggest gainer on the FTSE 100 overall. Shares in the bank climbed by more than 14%.
Shares in British Gas-owner Centrica climbed (CNA.L) jumped by more than 8%.