Hopes of an Obama Bounce lift Wall Street
Growing hopes for an Obama Bounce sent Wall Street shares leaping today on the belief the Democrat Presidential candidate will win the US election with a landslide and control of both houses in Congress.
The Dow Jones is expected to gain more than 180 points today as US investors bet that a conclusive Barack Obama victory at the polls will repair Wall Street sentiment and give the US economy a shot in the arm.
David Buik of broker BGC said: "It's all happened in the hour before the Wall Street bell. The experts are saying it's Obama by a landslide so it's happy days for the markets. There is a view Obama could unite the country and build bridges with the rest of the world."
Punters on Betfair pushed Obama into odds of 1-20 to win but Buik warned the euphoria could be shortlived. "I would say, 'Enjoy it while you can'," said Buik. "In a couple of days, it will be back to reality on the markets."
The London stock market pushed forward to what is set to be its sixth consecutive day of gains - the first such run this year. Recovering financial stocks helped the FTSE 100 to a 115.9-point gain by lunchtime, at 4559.1. Schroders, the Prudential and the London Stock Exchange all rose by almost 10%. HBOS and Barclays were both up 7%.
Rising European banks led by Société Générale, up 8%, saw the CAC 40 in Paris lift 106 points to 3634 while the Dax in Frankfurt rose 117 points to 5144. Interbank overnight lending rates fell nearly five basis points, making three-month sterling available at 5.7275%.
