Most equity benchmarks now measure recoveries from the worst of the Brexit shocks. Having rallied to an eleven month high yesterday, Tuesday promises a more tepid start for London’s FTSE 100.
The promise of a new Prime Minister as Theresa May emerged as the last one standing in the Conservative party’s leadership race was a boost to equities following on from Bank of England’s latest supportive pledge and positive US employment stats.
Michael Hewson, analyst at CMC Markets said, “With the political transition likely to be done and dusted by the middle of the week we could well find out quite quickly what the next steps are with respect to time lines and intentions with respect to the UK’s relationship with the EU and article 50”.
“It would seem that for now financial markets like the idea of a known quantity at the head of government in the form of Theresa May as opposed to the unknown quantity that was Andrea Leadsom, that being said our new PM isn’t likely to get too much of a honeymoon period.”