FTSE100 (also known as footsie) is a share index making up of the hundred biggest blue-chip companies in the UK market. These companies represent approximately 80% in value of the Stock market. This equates to about 9% of the global share market. As London is the financial hub of Europe, the FTSE100 is Europe’s most important index. The performance of the FTSE100 paints a clear picture of current international and economic events, as a number of the companies in the index do business overseas. The index is impacted by geopolitical factors, monetary policies and other issues affecting specific firms and industry sectors. For example, during the Trade War between China and the US, FTSE100 dropped by 1.5% at 7,267.
FTSE100 will also be affected by the negotiations between the UK and the EU on conditions of Brexit.
At present, British Prime Minister Theresa May spoke in favour of the so-called “soft” Brexit, which implies that before leaving the European Union completely, the UK would enter a 21-month transition period and keep the agreements with some organizations. This would have provided some space, while the two sides tried to negotiate a trade deal. The opposite is a no-deal leaving, which means that the UK would immediately leave the EU, the single market and customs union. However, May’s deal was voted down three times by the Parliament. In May 2019 she announced her resignation as party leader. Nevertheless, she stays in office as Prime Minister until a successor is appointed.
These are a few possible runners to become Britain’s next Prime Minister.
1. Boris Johnson
He is the most popular candidate among conservative party members. No other candidate came close to him during the voting, as he received the support of more than 100 of his fellow Members of Parliament in every round. Johnson stands for leaving the EU on the 31 of October “deal or no-deal”. However, he also said that a no-deal exit would cause “some disruption”.
2. Michael Gove
The Environment Secretary’s odds of becoming the next leader have jumped up and down over the past few months. He was one of the co-conveners of the Vote Leave campaign in 2016. So, his pro-Brexit stance should help him get the support of the Eurosceptic wing of Conservatives.
3. Jeremy Hunt
Originally a Remainer, since 2016 Hunt has slowly moved to the Leave side. He is in favour of changes negotiated by Theresa May and says that there is a prospect of doing a better deal with the EU. No-deal leaving is not his preferred option, but he said he would do it, if it were the only way.
How will the Stock market react on these coming changes? Make your bets.