LONDON: European shares rose on Thursday after Liz Truss said she was resigning as the United Kingdom’s prime minister, brought down by her economic programme that wrecked havoc on markets.
The region-wide STOXX 600 closed 0.3% up after flirting between gains and losses right after the announcement in London.
Appointed on Sept. 6, Truss was forced last week to sack her finance minister and closest political ally, Kwasi Kwarteng, and abandon almost all of her economic programme after their plans for vast unfunded tax cuts crashed the pound and British bonds, forcing the Bank of England to intervene.
A leadership election will be completed within the next week. Sterling rallied and the London’s FTSE 100 closed higher.
“Truss took on an extra relevance to markets because of the policies that she attempted to implement and the markets’ reaction to them,” said Steve Sosnick, chief strategist at Interactive Brokers.
“You’d think that if someone was that deeply unpopular the market might rally or the currency might rally when she left. But I think the fact that neither is happening is telling us that markets do crave political stability and we don’t have that.”
Meanwhile, Finnish telecom equipment maker Nokia and rival Ericsson reported weaker-than-expected earnings, bruised by ongoing patent battles which pressured margins and offset strong demand for 5G equipment.
Shares of the companies slumped 7.6% and 14.8%, respectively.
More than half of the sectors advanced, with tech rising 1.94%. Telecom was the biggest loser, down 2.5%.
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