FTSE 100 Evaluation and Information

  • Boris Johnson in for a Powerful Time
  • Conservatives Shedding its Majority in Parliament – Basic Election Potential
  • FTSE 100 vs FTSE 250: Political Uncertainty Reigns

Boris Johnson in for a Powerful Time

The following Prime Minister Boris Johnson will face a troublesome time from the off along with his affirmation as the subsequent Tory Chief prone to be met with extra resignations from the Conservative social gathering (Philip Hammond and David Gauke to resign). That mentioned, the margin of victory for Boris Johnson will carry some weight as a powerful win will recommend agency help for Mr. Johnson’s Brexit stance. (Of observe, the ultimate Conservative Dwelling Ballot had Boris Johnson gaining 73%). Nevertheless, consequence that’s under 60% might encourage these MPs who’re towards a no-deal Brexit. Consequently, on condition that uncertainty will proceed to reign, positive factors within the Pound are prone to be restricted, thus supporting the FTSE 100 over the FTSE 250.

Conservatives Shedding its Majority in Parliament – Basic Election Potential

Yesterday, it had been reported that Tory MP Charlie Elphicke had been charged with sexual assault, consequently shedding his Tory whip. In flip, this reduces the Conservatives working majority to a few. There may be additionally a excessive chance that the by-election on August 1st will see the Tory’s lose their seat, additional decreasing the working majority to 1. As such, with dangers rising that there may very well be extra defections and resignations, the federal government below Boris Johnson is prone to be quite weak. Subsequently, an early election may very well be a possible resolution for Boris Johnson, notably given the dwindling help for the Labour social gathering. Nevertheless, for an election to happen, it’s seemingly {that a} additional extension could be wanted to facilitate one.

FTSE 100 vs FTSE 250: Political Uncertainty Reigns

Given {that a} Boris Johnson authorities is unlikely to scale back the present uncertainty and along with his rhetoric that he’s prepared to hold out a no-deal Brexit. The FTSE 100 stands pat to outperform relative to the FTSE 250 amid weak spot within the Pound. Of observe, the Pound has a adverse correlation with the FTSE 100, largely on the premise {that a} weak Pound helps FTSE 100 profitability with two thirds of the income generated from the highest 100 firms generated abroad. Whereas for the FTSE 250, a weak Pound will usually weigh on the domestically targeted FTSE 250.

Boris Johnson to be Next UK Prime Minister: FTSE 100 vs FTSE 250

Chart by IG

KEY TRADING RESOURCES:

— Written by Justin McQueen, Market Analyst

To contact Justin, e mail him at Justin.mcqueen@ig.com

Comply with Justin on Twitter @JMcQueenFX





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