European stock markets rallied 

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European stock markets rallied with the UK’s FTSE 100 jumping nearly 103 points or 1.5% to 6,793 as investors expressed relief at the FBI’s announcement that it would take no action against Hillary Clinton over emails linked to the Democrat US presidential candidate’s private server.

Futures are tipping the S&P 500 index will rise 1.2% this afternoon, breaking a nine-session losing streak for the US stock market benchmark. With some of the electoral clouds lifting, investors can focus on the postitive US jobs figures published on Friday.

Michael Hewson of CMC Markets cautioned: Its unlikely that Trump will go quietly into the night if he loses, which means that investors are likely to remain cautious ahead of tomorrows finale.

Joshua Mahony of IG Markets, said financial betting on its website showed traders believed Clinton had improved her chances of victory to 83.5% from 74% over the weekend.

However, if the EU referendum taught us anything, it is not to be complacent when there is a vote against a campaign which appeals to the disaffected and marginalised section of a population, he said.

Dividend relief at HSBC

In London HSBC Holdings, was a big riser, gaining 4% to 618.5p after the bank’s third quarter results reassured analysts over the security of its dividend.

A change by the Prudential Regulation Authority in its treatment of HSBC’s stake in China’s Bank of Communications allowed the bank to report an improved core tier one capital ratio of 13.9%. There had been concerns the bank might have to set aside more money to boost its capital buffer.

The rise in the share price came despite an 86% fall in third quarter profits to $843 million after the bank wrote down the value of its business in Brazil. Stripping out exceptional items, adjusted profits rose 7% to $5.6 billion during the three months to September.

Mining stocks were also in the ascendant with BHP Billiton, Antofagasta and Rio Tinto rallying between 4.1%-3.5%.

Fraudsters attack Tesco Bank

Tesco fell 1.1% to 202p after 20,000 customers of the supermarket’s bank had money taken from their accounts in an online attack by fraudsters over the weekend.

Tesco Bank has temporarily blocked online transactions and told customers that the bank will pay for any financial losses. ‘Customers are not at financial risk,’ Tesco Bank chief executive Benny Higgins told the BBC.

The ‘mid cap’ FTSE 250 index rebounded 147 points or 0.86% to 17,419 and the FTSE Small Cap index added 15 points or 0.3% to 4,879.

Trusts rally

Investment trusts were prominent in the rally outside the FTSE 100 with Alastair Mundy’s Temple Bar rising 3.2% to £11.26. BlackrockSmaller CompaniesLindsell TrainBiotechGrowth and Strategic Equity Capital gained 2.8%-4%.

The pound fell against a revived dollar, down nearly 1% to $1.2396 against the US currency. This maintains the trend of last week when sterling rose as the FTSE 100 fell in response to the High Court Brexit ruling.

Against the euro the pound fell to 89.14 cents.

Oil prices rose with Brent crude futures jumping 72 cents to $46.30 a barrel.

Safe havens were out of favour with gold dropping $19.44 to $1,284.21 an ounce. UK government bonds also fell in value with yields (which move in the opposite direct to prices) on ten-year UK gilts lifted over seven basis points (0.73%) to 1.204%.

In Europe the Euro Stoxx index gained five points or 1.6% to 323  points.

Source: CityWire

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