Yahoo Finance Asian markets rally after Conservative party win in UK election
Markets in Asia climbed overnight amid increasing optimism about a US-China trade deal and the results of the UK general election.
Prime minister Boris Johnson’s emphatic election win paves the way for the UK’s departure from the European Union at the end of January.
“For the markets and for business this is the perfect result — a clear majority for the Tories, the Corbyn risk nullified entirely, a major reduction in uncertainty around Brexit and even a quick budget to inject the economy with some added impetus,” said Neil Wilson, the chief market analyst at Markets.com, on Friday.
Japan’s Nikkei 225 (^N225) was up by more than 2%, while Shanghai’s SSE Composite (000001.SS) climbed by nearly 1.8%. The Hang Seng (^HSI) in Hong Kong was up by 2.35%.
READ MORE: Pound rockets as Boris Johnson's Conservatives win general election
Asian markets took their cue from record highs in US markets, said Wilson, after US president Donald Trump said the US was getting very close to a trade deal with China.
“Although not quite signed, sealed and delivered, it seems like the US and China have come to terms.”
While, an announcement on the deal is expected later on Friday, the UK election results gave global markets a further boost.
READ MORE: How the pound’s exchange rate after the UK election will affect you
Traders will now be convinced that many of the major risks to the world economy — trade tensions in Asia, a potential crash-out Brexit — have diminished, something that is likely to herald record gains for stocks in the final weeks of the year.
Meanwhile, the pound surged the most in a decade to reach its highest levels since May 2018 in the wake of the election result.
Analysts expect London’s FTSE to make gains on Friday when markets open in Europe.
“The Conservative Party has secured an historic mandate with a thumping victory, providing clarity for investors where there was confusion,” said Wilson.
