London Markets Defy Political Pressure as FTSE Indices Close Higher
Stock prices in London closed higher on Monday, even as political turmoil intensified with Scottish Labour leader Anas Sarwar demanding Prime Minister Sir Keir Starmer's resignation. The FTSE 100 index rose by 16.48 points, or 0.2%, to settle at 10,386.23, while the FTSE 250 increased by 132.14 points, or 0.6%, to 23,340.03. The AIM all-share index also saw gains, closing up 10.24 points, or 1.3%, at 817.04.
Political Crisis Deepens with Sarwar's Call for Starmer to Quit
In a significant blow to Sir Keir Starmer's fragile authority, Anas Sarwar, the leader of Scottish Labour, publicly called for the Prime Minister to step down. Sarwar made this demand during a press conference, citing the scandal surrounding Lord Peter Mandelson's appointment as British ambassador to Washington, despite known links to Jeffrey Epstein. This move marks Sarwar as the most senior Labour politician to urge Starmer's resignation, with Scottish Labour facing a challenging Holyrood election in May, where polls suggest they may finish third behind the SNP and Reform.
Cabinet ministers quickly rallied to support Starmer, with Downing Street firmly stating that the Prime Minister would not resign. A spokesperson emphasized Starmer's electoral mandate, noting he is one of only four Labour leaders to have won a general election and has a clear five-year plan to deliver change. Deputy Prime Minister David Lammy echoed this sentiment on social media, urging focus on Labour's mission to transform Britain.
Market Analysis and Currency Movements Amid Uncertainty
Despite the political upheaval, UK assets showed resilience. StoneX analyst Fawad Razaqzada commented that while calls for Starmer's resignation are growing louder, the GBP/USD held steady and the FTSE 100 remained near record levels, possibly due to a global risk rally. However, he warned that political uncertainty could make the pound bearish in the near term, affecting currency pairs like EUR/GBP and GBP/JPY.
At the London equities close, the pound was quoted higher at 1.3668 dollars, up from 1.3612 dollars on Friday. The euro also rose to 1.1897 dollars from 1.1814 dollars, while the dollar traded lower against the yen at 156.04 yen compared to 157.04 yen.
Sector Performance and Corporate Highlights
Miners led the gains on the FTSE 100, buoyed by rising gold prices. Antofagasta surged 6.6%, followed by Fresnillo with a 4.6% increase, as gold prices climbed to 5,068.99 dollars an ounce from 4,946.87 dollars. In contrast, NatWest fell 6.0% despite launching a £750 million share buyback and confirming a £2.7 billion acquisition of wealth manager Evelyn Partners. Shore Capital analyst Gary Greenwood expressed caution over the deal's economics, highlighting reliance on synergy delivery.
On the FTSE 250, Plus500 topped the risers with a 9.3% gain after reporting strong momentum and raising shareholder returns. Among smaller caps, Quantum Data Energy dropped 24% after raising £1.2 million for project development, while Chill Brands rose 22% due to robust demand for its platform.
Regulatory Developments and Global Market Trends
The Financial Conduct Authority plans to publish all trading data for London-listed shares to address under-reporting of market liquidity, as reported by the Financial Times. This move aims to retain listings amid competition from the US. In European markets, the CAC 40 in Paris closed up 0.6% and the DAX 40 in Frankfurt ended up 1.2%. EU chief Ursula von der Leyen advocated for favoring European firms in strategic sectors to boost competitiveness.
In the US, stocks were mixed with the Dow Jones Industrial Average down marginally, the S&P 500 up 0.5%, and the Nasdaq Composite up 1.0%. US Vice President JD Vance visited Armenia to advance peace efforts and infrastructure projects, reflecting shifting geopolitical dynamics. Treasury yields narrowed slightly, and Brent oil prices increased to 68.85 dollars a barrel.
Key Movers and Upcoming Events
The biggest risers on the FTSE 100 included Antofagasta, Fresnillo, Metlen Energy, Rolls-Royce, and Endeavour Mining, while the biggest fallers were NatWest, British American Tobacco, Barratt Redrow, BT, and British Land. Looking ahead, Tuesday's economic calendar features the UK's BRC retail sales monitor and US retail sales data, with corporate results expected from companies like AstraZeneca, BP, and Coca-Cola HBC.
