Closing summary
Global shares have continued the rally seen in recent days, cheered by optimism over US interest rate cuts (sparked by weaker US data and remarks by Fed chief Jerome Powell on Tuesday).
As the UK goes to the polls, the FTSE 100 index has gained 1%, or 82 points, to 8253. It is the biggest riser among the main European stock markets today, followed by France, up 0.8%, Italy, up 0.7% and Germany, up 0.4%. US markets are closed for a national holiday.
The pound is steady as we await the outcome of the UK’s general election, with exit polls at 1pm. It is trading at $1.2748 against the dollar, and at €1.1807 against the euro.
There are hopes that political wrangling in France to stop Marine Le Pen’s far-right National Rally winning an outright majority in parliament can succeed, after more than 200 candidates pulled out of Sunday’s legislative election runoff to avoid splitting the anti-far-right vote.
France’s prime minister Gabriel Attal said yesterday: “We can avoid an absolute majority for the far right,” adding that 90% of candidates from President Emmanuel Macron’s centrist camp had quit three-way races if they were in third with an RN candidate ahead of them.
The UK’s construction sector continued to expand in June, although it lost some momentum amid a fresh fall in housebuilding, according to a survey.
In stark contrast, construction in the eurozone remains mired in recession, according to a separate survey. Construction activity shrank at a faster rate last month, with German companies posting the biggest slump.
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Thank you for reading. I’ll be back at 6am tomorrow. Bye! – JK
Updated
Energy commodity trading in muted reaction to prospect of Labour victory
The muted market reaction to the prospect of a Labour party victory in the UK’s general election is evident even in energy commodity markets today, where traders are not expecting to be caught out by any surprises.
“Election results look quite certain,” one trader told the Guardian. “Commodity traders won’t be working past 5pm.”
The potential for Labour’s manifesto points to translate into price movements appears limited, according to Robbie Jackson-Stroud, an analyst at commodities data provider ICIS.
Jackson-Stroud said that any policies designed to spur the development and construction of new energy capacity requires time to agree upon at a policy level, as well as planning and then construction.
He added that “cost constraints in the current climate are the driver of investment in renewable capacity, and a change of party does not shift that.”
But the commodity market’s underwhelming response to a potential Labour government has had one exception: the UK’s market for carbon credits. Traders have placed record bets that the price of UK carbon allowances, known as UKAs, would rise on the basis that a future Labour government would bring in tougher climate policies making it more expensive to pollute.
“UKA prices have already rallied on expectation of improved green policies and the possibility that the UK’s carbon market may link with the EU market under a Labour government,” the trader said.
The benchmark UKA price climbed to highs of £50 a tonne in the weeks after the election was announced, from lows of £31 a tonne earlier this year. On Thursday the price reached an intra-day high of £46.30 a tonne.
