ADVERTISEMENT

U.K. Stocks Maintain Losses As Liz Truss Wins Leadership Race

UK stocks maintained losses as Liz Truss was confirmed as the country’s next prime minister, amid broader risk-off sentiment.

U.K. Stocks Maintain Losses As Liz Truss Wins Leadership Race

UK stocks maintained losses on Monday as Liz Truss was confirmed as the country’s next prime minister, amid broader risk-off sentiment.

The UK’s FTSE 100 Index was down 0.7% as of 12:54 p.m. London time, as sterling traded little changed at $1.1506. The domestically-focused FTSE 250 fell 1.1%.

U.K. Stocks Maintain Losses As Liz Truss Wins Leadership Race

“The news of a Truss victory comes as little surprise to the markets given that she has been the firm favorite for a number of weeks,” Dan Boardman-Weston, chief executive officer and chief investment officer at BRI Wealth Management, said by email. 

A Stock Trader’s Guide to the Conservative Leadership Election

Banking stocks, which are sensitive to interest rates, extended losses very slightly. Truss’s proposed tax cuts have been criticized by many investors as inflationary, and she’s talked about changing the central bank’s mandate. 

“PM Truss will likely be less keen to balance the country’s books than former Chancellor Sunak would have been, and interest rates are likely to increase further during her premiership,” said Frédérique Carrier, head of investment strategy at RBC Wealth Management.

The UK’s midcap stocks, which are more exposed to the local economy, have come under particular pressure this year. The index is down 21% versus the FTSE 100’s 1.9% decline. The FTSE 250 is on course for its biggest ever annual underperformance versus the exporter-based FTSE 100.

UK’s Slumping Local Stocks Reflect Headache Facing New Leader

More stories like this are available on bloomberg.com

©2022 Bloomberg L.P.