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Most UK stocks on the FTSE 100 and FTSE 250 rose on Wednesday (6 November) as US election results indicated a win for former president Donald Trump. In fact, stocks rose globally, with some exceptions, notably China.
So, why are they rising? Well, the stock market and bonds market, to some extent, priced in the likelihood of a Trump victory — the so-called ‘Trump Trade’. However, with the victory seeming secure, the market is now fully pricing in that victory and selling the ‘Harris Hedge’.
Broadly speaking, analysts have suggested that Trump’s proposed economic policies — deregulation and tax cuts coupled with promises to end the war in Ukraine and lower energy prices — will be good for stocks and better than Harris.
So, let’s take a closer look at four stocks shifting after the election.
Ferrexpo: the big mover
Ferrexpo (LSE:FXPO) is an Ukraine-focused mining company. I covered this one a lot two years ago when the war started, but interest in the iron ore producer dipped as the conflict endured.
However, the stock is up 21% since the start of trading on Wednesday, complementing gains from earlier in the week. The likely explanation is Trump’s claim he can bring an end to the war in Ukraine.
Nobody knows whether a negotiated settlement is truly possible or what Trump’s proposed deal would look like. However, an end to the conflict would likely be good for businesses and miners like Ferrexpo.
The business has survived throughout the war, but not without severe challenges. Ferrexpo has around 700 staff members serving with the Ukrainian Armed Forces, and to make matters worse, iron ore prices have recently fallen to their lowest levels since 2022.
Nonetheless, the company has suggested that proposed stimulus measures in China could be supportive for the iron ore price — China imports much of the world’s iron.
Bank of Georgia: it’s political
The Bank of Georgia is up 5% as I writeSH. The stock has been volatile in recent weeks as the country held a much-awaited and highly-contested election. Georgia’s election was won — despite allegations of corruption — by the incumbent Georgian Dream party.
So, why is the stock up? Well, the Georgian Dream party has been too close to Moscow for many in the West. As such, it’s possible that Georgia would benefit from improving relations between Washington and Moscow.
Banks typically reflect the health of an economy, and as such, that’s probably why we’re seeing Bank of Georgia stock rise.
Argo Blockchain: Bitcoin mining
Argo Blockchain is a UK-listed crypto mining firm. The stock was up 17% in morning trading on 6 November. Crypto investors are betting on a more favourable regulatory environment under Trump, which could potentially benefit companies like Argo Blockchain. The broader cryptocurrency market also rallied on the news.
BAE Systems: focus on defence
An end to the war in Ukraine could result in a meaningful reduction in near-term demand for munitions and weaponry, although Western nations would need to replenish stocks donated to Ukraine.
However, Trump has promised to make the US’s NATO allies pay for their own defence. And this could see European nations commit to long-running defence programmes. One beneficiary of this would be BAE Systems, Europe’s largest defence company.
The stock was up 5% in morning trading.
