FTSE boosted by Trump victory as analysts predict stunning result will be ‘very favourable’ for UK stock market

UK stocks saw a bounce today in the wake of Donald Trump’s stunning victory in the US election.

The FTSE 100 rose by as much as 130 points in early trading before giving up some of its gains.

The move came as analysts predicted the Republican’s return to office could herald a new boom for the index due to its reputation for stable returns.

Markets believe Mr Trump’s plans to crack down on immigration, cut taxes and impose tariffs will drive inflation upwards and increase US debt.

Interest rates on US government borrowing hit four-month highs this morning while the dollar surged.

US equity futures were up almost 2 per cent, while the Paris exchange was up one per cent and Frankfurt 0.8 per cent in initial trading.

The FTSE 100 rose by as much as 130 points in early trading before giving up some of its gains

The strength of the US dollar – partly linked to higher bond yields – saw it gain ground against both sterling (pictured) and the euro 

The strength of the US dollar – partly linked to higher bond yields – saw it gain ground against both sterling and the euro.

Bitcoin also jumped to a record high, with Mr Trump and his ally Elon Musk seen as supporters of the cryptocurrency. 

Gervais Williams, head of equities at investor Premier Miton, told the BBC this morning that the election of Mr Trump marks ‘quite a decisive shift away from globalisation to more protectionism’.

‘What we’ve seen is that actually equity markets perhaps are peaking already, valuations have already moved up very substantially in the US,’ he said.

‘We are now going to move back to small companies. We are seeing small companies beginning to revive in the US and I think that is going to be a wider feature across the European market as well.’

Mr Williams said: ‘The interesting thing about the London market is we’re actually much more defensive, a lot of our companies generate surplus cash, they are capital intensive, they tend to generate yield.

‘If we’re going to a more unsettled economic environment then actually this is going to be very favourable for the UK.

‘My own view is that the UK market, irrespective of the UK economy or indeed anything on the government side, is going to be the top performer, probably for the next 10 or 20 years.’