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Dec. 13, 2019, 9:55 a.m. EST

British stocks surge after Johnson’s Conservatives win majority

Home builders and banks among the gainers

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By Steve Goldstein, MarketWatch


Getty Images
Britain's Prime Minister and leader of the Conservative Party, Boris Johnson makes a speech in Westminster as the Conservatives celebrate a sweeping election victory on December 13, 2019 in London, England.

Home builders and banks in the U.K. rallied on Friday in relief at a commanding Conservative victory in the general election.

Equity strategists at Citi said the U.K. election result “is probably as good as it gets.” While Conservatives had led in polls since the election was called, it wasn’t clear beforehand that they would win a majority in Parliament. Read more about the election.

The FTSE 250 /zigman2/quotes/210598417/delayed UK:MCX -0.58%  climbed 3.4% to 21507.50. Investment managers, real estate investment trusts and home builders led the way as investors flocked to stocks more exposed to the domestic economy. Double-digit gainers included lender Virgin Money UK /zigman2/quotes/207233909/delayed UK:VMUK -0.92% , bus operator Stagecoach Group /zigman2/quotes/206082799/delayed UK:SGC -0.29%   and real-estate agent Savills /zigman2/quotes/202124149/delayed UK:SVS +0.09%  .

Goldman Sachs strategists reiterated a call on Friday to go long U.K. domestic stocks, particularly homebuilders and domestic banks. “Clarity on the UK’s terms of exit from the EU should unlock pent-up business investment; the reversal of a decade of fiscal consolidation should provide a fillip to domestic demand; and a pick-up in global growth should underpin a recovery in net exports,” said analysts Zach Pandl, Sharon Bell and George Cole.

The large-cap FTSE 100 /zigman2/quotes/210598409/delayed UK:UKX -1.07%  also gained ground, rallying 1.5% to 7382.19.

The surge in the pound /zigman2/quotes/210561263/realtime/sampled GBPUSD +0.0081%  was a drag from companies that generate most of their revenue outside the U.K., such as pharmaceutical GlaxoSmithKline /zigman2/quotes/200381158/delayed UK:GSK -0.90%  and beverage maker Diageo /zigman2/quotes/205611832/delayed UK:DGE -1.96%  . However, news that the U.S. and China are on the verge of signing a trade agreement boosted stocks worldwide.

Large-cap advancers included home builders Persimmon /zigman2/quotes/206444744/delayed UK:PSN -1.17% , Taylor Wimpey /zigman2/quotes/208623755/delayed UK:TW -1.18% , Berkeley Group /zigman2/quotes/202576163/delayed UK:BKG +0.57%  and Barratt Developments /zigman2/quotes/209812640/delayed UK:BDEV -0.41% . U.K. banks Royal Bank of Scotland  and Lloyds Banking Group /zigman2/quotes/202285510/delayed UK:LLOY 0.00%  also surged.

/zigman2/quotes/210598417/delayed
UK : FTSE UK
19,949.44
-116.15 -0.58%
Volume: 300,580
May 18, 2022 4:59p
loading...
/zigman2/quotes/207233909/delayed
UK : U.K.: London
£ 146.15
-1.35 -0.92%
Volume: 1.21M
May 18, 2022 4:35p
P/E Ratio
3.82
Dividend Yield
0.02%
Market Cap
£2.13 billion
Rev. per Employee
£273,514
loading...
/zigman2/quotes/206082799/delayed
UK : U.K.: London
104.10 p
-0.30 -0.29%
Volume: 1.59M
May 18, 2022 4:35p
P/E Ratio
14.48
Dividend Yield
0.00%
Market Cap
£575.79 million
Rev. per Employee
£43,446
loading...
/zigman2/quotes/202124149/delayed
UK : U.K.: London
1,073.00 p
+1.00 +0.09%
Volume: 203,367
May 18, 2022 4:35p
P/E Ratio
10.75
Dividend Yield
3.20%
Market Cap
£1.50 billion
Rev. per Employee
£54,885
loading...
/zigman2/quotes/210598409/delayed
UK : FTSE UK
7,438.09
-80.26 -1.07%
Volume: 690,708
May 18, 2022 4:51p
loading...
/zigman2/quotes/210561263/realtime/sampled
US : Tullett Prebon
1.2345
+0.0001 +0.0081%
Volume: 0.0000
May 18, 2022 5:15p
loading...
/zigman2/quotes/200381158/delayed
UK : U.K.: London
£ 1,770.20
-16.00 -0.90%
Volume: 5.86M
May 18, 2022 4:35p
P/E Ratio
17.54
Dividend Yield
N/A
Market Cap
£90.38 billion
Rev. per Employee
£404,857
loading...
/zigman2/quotes/205611832/delayed
UK : U.K.: London
3,761.00 p
-75.00 -1.96%
Volume: 2.96M
May 18, 2022 4:35p
P/E Ratio
28.93
Dividend Yield
1.97%
Market Cap
£87.91 billion
Rev. per Employee
£497,283
loading...
/zigman2/quotes/206444744/delayed
UK : U.K.: London
2,116.00 p
-25.00 -1.17%
Volume: 762,369
May 18, 2022 4:35p
P/E Ratio
8.61
Dividend Yield
11.11%
Market Cap
£6.83 billion
Rev. per Employee
£694,861
loading...
/zigman2/quotes/208623755/delayed
UK : U.K.: London
125.75 p
-1.50 -1.18%
Volume: 10.29M
May 18, 2022 4:35p
P/E Ratio
8.26
Dividend Yield
6.82%
Market Cap
£4.54 billion
Rev. per Employee
N/A
loading...
/zigman2/quotes/202576163/delayed
UK : U.K.: London
4,048.00 p
+23.00 +0.57%
Volume: 191,680
May 18, 2022 4:35p
P/E Ratio
9.73
Dividend Yield
0.24%
Market Cap
£4.48 billion
Rev. per Employee
£934,196
loading...
/zigman2/quotes/209812640/delayed
UK : U.K.: London
485.80 p
-2.00 -0.41%
Volume: 2.39M
May 18, 2022 4:35p
P/E Ratio
7.58
Dividend Yield
6.81%
Market Cap
£4.98 billion
Rev. per Employee
£721,141
loading...
/zigman2/quotes/202285510/delayed
UK : U.K.: London
43.80 p
0.00 0.00%
Volume: 116.48M
May 18, 2022 4:35p
P/E Ratio
5.87
Dividend Yield
4.57%
Market Cap
£30.31 billion
Rev. per Employee
£724,994
loading...

Steve Goldstein is MarketWatch markets editor for Europe. Follow him on Twitter: @MKTWgoldstein.

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