The pan-European Stoxx 600 index was up 0.54% in early deals, while the UK’s FTSE 100 was up 0.84% after Monday’s humiliation for Prime Minister Liz Truss when her new finance minister Jeremy Hunt shredded her economic plan in a bid to quell market turmoil.
Markets were also boosted by a positive US session overnight, with Bank of America (NYSE:BAC) beating expectations and driving a rally on the Nasdaq.
Truss, whose future appears to be in doubt, struck a defiant tone overnight when she insisted she would lead the Conservative Party into the next election, due in 2024, even as MPs were openly calling for her to resign.
Meanwhile, Hunt had installed an advisory group of largely hedge fund managers, including Rupert Harrison from Blackrock (NYSE:BLK), infamous for foisting austerity on Britain with then finance minister George Osborne after the financial crash of 2008.
Hunt has already warned of higher taxes and spending cuts, signalling to already hard-pressed Britons that more austerity is coming their way.
“There’s no denying that the Trussonomics agenda to slash taxes, boost spending, borrow, and hope that growth will pay for it, is now dead,” said Victoria Scholar at Interactive Investor.
“The bond vigilantes won after the gilt market turmoil prompted emergency intervention from the Bank of England.”
In equity news, Sweden’s Avanza Bank surged 15% after better-than-expected third-quarter profits.
Housebuilders fell as UK firm Bellway (LON:BWY) reported softening demand amid the cost of living crisis and rising mortgage rates. Vistry and property firm Derwent London were also lower.
Roche fell as quarterly sales declined 6% after a slump in Covid-19 treatments and diagnostic testing.
Reporting by Frank Prenesti for Sharecast.com
