ELECTION LIVE: Boris Johnson’s landslide victory will calm markets, say analysts

By Yana Berman

As the Conservative party wins the UK general election, the pound surges while gold and silver see a drop

Prime Minister Boris Johnson has gained the largest Tory majority in a UK general election since Margaret Thatcher’s third victory in 1987.

Most analysts agree the results will have a positive effect on the markets. Neil Wilson, chief market analyst at Markets.com, says the current situation in the UK is “the perfect result” both for markets and businesses, as Johnson's triumph means a major reduction in uncertainty about Brexit and a budget to revive the economy.

Andy Scott of JCRA says: “There was as much relief, as there was excitement at the size of the majority.” He also predicted that if sterling continued growing, it could rise up to €1.25 and even $1.40 quite soon.

Meanwhile, Benjamin Nabarro of Citi, evaluates the results of the general election as a big success and foresees an “economic relief rally” that could boost the pound and drive economic confidence.

Barclays’ Emmanuel Cau stresses that the country has finally escaped the disorderly Brexit and the risks associated with a Labour government. He thinks that Johnson’s party will “give legs” to UK domestic business performance.

Morgan Stanley represented by Jacob Nell and Bruna Skarica conclude that “investors will start to rotate back to the UK,” which is currently one of the most unloved and undervalued major stock markets.

0'>Gold and 0'>silver, which normally show the investors’ sentiment towards the political situation, were trading lower amid the news on the UK election. Experts believe that metals could face some extreme volatility amid Johnson's victory and recent developments in trade talks between the US and China.

The oil prices were also slightly up during the morning, with WTI Crude and Brent up 0.73 per cent and 0.91 per cent, respectively.

FURTHER READING: UK Conservative party to win majority of 86 seats, says exit poll

FURTHER READING: Pound surges as Conservatives sweep to big general election victory

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