Housebuilding stocks rise as UK markets react to Labor election slip-up

LONDON – London-listed shares rose broadly on Friday, led by housebuilders, as investors reacted to the Labor Party’s landslide victory in the UK election.

The UK’s FTSE 100 rose 0.4% as investors reacted to election results The broader pan-European Stoxx 600 rose 0.5% in morning deals.

The top news story on investors’ minds on Friday was the result of the UK general election, with the opposition Labor Party winning a large parliamentary majority, ousting the incumbent Conservatives after 14 years.

The FTSE 350 home goods and housebuilding index rose about 1% on Friday as traders reacted to news of the Labor victory.

Looking at individual stocks within the sector, Date shares rose 2.9%, while Taylor Wimpey, Barratt Developments and Bellway were all up around 2%.

Early on Friday morning, Labor passed the threshold needed to govern alone after outgoing Prime Minister Rishi Sunak conceded defeat. Keir Starmer, the centre-left Labor leader, will become the country’s next prime minister and declared victory in the early hours. Analysts expect the Labor victory to boost UK markets over time, particularly when it comes to housebuilding.

In a research note on Friday, analysts at RBC Capital Markets said that if Labour’s election promises turn into politics, it could mark the dawn of a “new era” for UK housebuilding.

“Over the past few years the potential of homebuilders has been constrained, but over the next few years this potential is likely to be unleashed,” they write.

“If the new Government’s walk matches its talk, we expect the sector to reassess and in the very short term we suspect that talk alone will be enough to lift share prices,” they added.

In corporate news, French bank BNP Paribas and Swiss lender UBS are said to be expressing interest in buying HSBC’s German wealth management unit, Bloomberg News reported on Thursday, citing people familiar with the matter.

Shares in HSBC fell about 1% on Friday.

In Asia-Pacific, markets were mostly lower on Friday, with Japan’s Nikkei 225 improving after breaking past the 41,000 mark and hitting new record highs.

Statewide, S&P 500 futures were trading relatively flat on Friday as investors braced for the release of a closely watched jobs report.