London’s FTSE 100 (^FTSE) surged on Wednesday, as global markets eyed a potential Democratic sweep in the closely-watched Georgia Senate race.
The blue-chip index closed 3.7% higher in London, outperforming other indexes on the continent.
“It’s been a really impressive day and really underlines the pent-up demand for UK equities,” said Neil Wilson, chief market analyst at Markets.com.
The buoyant mood was helped by signs of a Democratic sweep in Georgia’s Senate elections. US television networks and the Associated Press news agency called the first of two runoff Senate races in Georgia, USA, for Democratic candidate Raphael Warnock. The result would unseat Republican Kelly Loeffler. Democratic challenger Jon Ossoff also holds a slim lead over Republican David Perdue in the other race, according to Reuters, with 98% of votes counted.
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UK banks benefitted from expectations of more expansionary US fiscal policy and higher taxes should the wins be secured and after president-elect Joe Biden enters office.
“The only plausible explanation is changing interest rate assumptions due to what’s happening in the US,” Sam Woods, deputy governor of the Bank of England, said of rising bank shares during an appearance in front of the Treasury Select Committee on Wednesday afternoon.
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Asian markets were mixed overnight as the final US Senate votes were being counted. While Japan’s Nikkei (^N225) fell 0.4% at market close, the Hong Kong Hang Seng (^HSI) rose 0.2% and the Shanghai Composite (000001.SS) gained 0.6%. South Korea’s KOSPI (^KS11) fell 0.8%.
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