(Alliance News) - Stock prices in London were higher at midday on Monday as investors cheered the prospective dawn of a new political era under US President-Elect Joe Biden.
Global equity markets were given a boost as Biden took the first steps Sunday towards moving into the White House in 73 days, while Donald Trump again refused to admit defeat and tried to sow doubt about the election results.
Over the weekend, Biden notched up a more than 700,000-vote margin in Pennsylvania and passed his Republican rival, Trump. US networks decided that the incumbent president was unable to win the state.
As a result, Pennsylvania's 20 Electoral College votes helped Biden across the 270-vote threshold needed for victory.
With congratulations pouring in from world leaders and supporters nursing hangovers after a night of celebrations, Biden and Vice President-Elect Kamala Harris announced they would receive a joint briefing on Monday in Wilmington, Delaware from their transition Covid-19 advisory team.
Trump, who has no public events scheduled for Monday, plans to file a string of lawsuits in the coming week, according to his lawyer Rudy Giuliani, who said he had "a lot of evidence" of fraud.
China declined to congratulate Biden as the winner of the election, saying the outcome of the vote was still to be determined. In addition, Russian President Vladimir Putin is waiting for official results before congratulating a winner, the Kremlin said.
In London, the FTSE 100 index was up 73.48 points, or 1.4%, at 5,983.50. The FTSE 250 was up 240.34 points, or 1.4%, at 18,158.17. The AIM All-Share was up 0.8% at 990.44.
The Cboe UK 100 was up 1.3% at 594.08. The Cboe 250 up 1.3% at 15,318.22. The Cboe Small Companies was up 1.3% at 9,887.86.
The CAC 40 in Paris Frankfurt's DAX 30 both were up 1.6%.
US stock market futures were pointed sharply higher as investors were hopeful that the chaotic nature of the Trump term of office, which left markets constantly on edge, was drawing to a close. Biden, a conventional politician with 40 years of experience in Washington, is expected to govern with the kind of steadiness that equity investors generally prefer.
The Dow Jones Industrial Average was called up 1.5%, the S&P 500 up 1.4% and the Nasdaq Composite up 1.8%.
"European markets are on the rise once again, with global stocks looking to carry on the bullish tone set throughout much of last week. Joe Biden may still have a host of law-suits from Trump to contend with, yet the risk-on sentiment we are seeing throughout markets highlights a confidence within the trading community that these legal challenges are nothing more than a bid to save face," said IG Group's Josh Mahony.
"Outside of the US, Biden's victory is expected to mark a break from the combative approach of his predecessor, with trade relations likely to improve after years of tariffs and threats. Instead, we are seeing a risk-on surge across global markets, with the change in leadership expected to bring lower tariffs, and higher stimulus. However, Biden's immediate decision to form a coronavirus taskforce does highlight the more pressing risk, with his leadership raising the likeliness of a nationwide lockdown as US cases top 10-million for the first time," Mahony added.
In the FTSE 100, Taylor Wimpey was the standout performer, up 12% after the housebuilder said it is on track to deliver full-year results towards the top end of expectations, supported by positive conditions in the UK housing market.
The housebuilder noted that customers have benefited from the short-term extension to the current phase of the UK government's Help to Buy scheme and the Stamp Duty Land Tax holiday.
Taylor Wimpey's total order book, excluding joint ventures, represents 11,530 homes as at the start of November. The order book stands at GBP3.0 billion, up 11% on GBP2.7 billion a year ago.
The High Wycombe-based firm said it is on track to deliver full-year results towards the upper end of market expectations. For 2020, the company-compiled consensus expectation is for operating profit to come in a range between GBP242 million to GBP292 million.
In addition, assuming the market remains broadly stable, Taylor Wimpey currently expects to deliver operating profit in 2021 materially above the top end of the current consensus range. The current company compiled consensus expectation for 2021, is for operating profit in the range of GBP359 million to GBP626 million.
Addressing England's new lockdown, Taylor Wimpey said the UK government has confirmed the housing market should remain open for business.
Turning to shareholder returns, Taylor Wimpey reiterated that it expects to recommence ordinary dividend payments in 2021, starting with the payment of a 2020 final dividend. It will review a special dividend in 2021 for payment in 2022.
"To tell the market you will top expectations in 2021... is a bullish move. This is underpinned by the company's bumper order book and the fact that house sales agreed now will not complete until next year. A return to dividends at the full-year stage and the promise of a possible 2022 special dividend will be music to the ears of income investors," said AJ Bell's Russ Mould.
Large-cap peers Persimmon, Barratt Developments and Berkeley Group were up 5.8%, 4.7% and 3.7% respectively in a positive read-across. The FTSE 350 Household Goods sector index was up 2.6%.
JD Sports was up 3.6% after JPMorgan started coverage on the sportswear retailer with an Overweight rating.
Anglo American was up 3.4% after Morgan Stanley upgraded the miner to Overweight from Equal Weight.
Elsewhere, Countrywide was up 41% at 204.60 pence after the estate agent said it has received a possible takeover offer valuing the firm at GBP81.8 million. Connells has approached Countrywide with a 250 per share offer, a 72% premium to Friday's closing share price of 145p.
The pound was quoted at USD1.3150 at midday on Monday, down from USD1.3172 at the London equities close Friday, as the deadline for the UK and EU to reach a deal on key Brexit issues edges closer.
UK Prime Minister Boris Johnson will not back down on his controversial Brexit legislation, despite it threatening to create early tensions with Biden, a Cabinet member has indicated.
Johnson, who was asked on Sunday whether he was determined to pass the bill in the face of Biden's criticisms, said: "Yes, as I told Ursula [von der Leyen, European Commission president] the parliamentary timetable goes ahead."
Environment Secretary George Eustice said the UK government would reinstate controversial clauses that enable ministers to break international laws if the House of Lords tries to strip them out.
Biden warned during his successful campaign against Trump that a trade deal with the US is "contingent" on the prevention of a return to a hard border on the island of Ireland.
Meanwhile, EU chief negotiator Michel Barnier was in London on Monday to resume trade talks with Downing Street counterpart David Frost.
Barnier tweeted he was "happy to be back" in the capital, with the two teams "redoubling our efforts" for an agreement. He listed the three major sticking points - governance, the level playing field and fishing policies - as the three "keys to unlock a deal".
Time is fast running out to get a deal in place by the end of the transition period on December 31, with businesses fearing the high trade tariffs they would face in the absence of an agreement.
"The pound remains susceptible to a significant amount of Brexit headline risk. Boris Johnson and Ursula von der Leyen said 'significant differences remain' in trade talks, citing fishing and the provisions for a level playing field. All the showboating and posturing should give way to pragmatism and the realpolitik of securing a deal before the New Year," predicted Markets.com analyst Neil Wilson.
The euro was priced a USD1.1870, lower from USD1.1887. Against the yen, the dollar was quoted at JPY103.62, down from JPY103.71.
Brent oil was trading at USD40.46 a barrel Monday at midday, up from USD39.66 on Friday evening. Gold was quoted at USD1,956.72 an ounce, higher than USD1,952.40.
By Arvind Bhunjun; arvindbhunjun@alliancenews.com
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