Markets welcome Bush victory

Investors in London today embraced the triumph of George Bush in the US presidential election by driving the FTSE 100 Index close…

Investors in London today embraced the triumph of George Bush in the US presidential election by driving the FTSE 100 Index close to a new two-year high.

The FTSE 100 Index closed up 25.3 points at 4718.5 on a late rush of buying after Mr Kerry conceded defeat in a telephone call to Mr Bush shortly after 4pm.

Early gains on the Footsie had been capped by fears that the result would be disputed over several days, with Mr Kerry vowing to wait until provisional ballots in Ohio had been counted.

In New York, the Dow Jones Industrial Average rose 180 points within 10 minutes of the opening bell on relief that a clear winner had emerged. Paul Webb, a trader at City spread-betting firm deal4free, said: "A Bush victory is without much doubt seen as good news for US business."

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Douglas McWilliams, chief executive of the Centre for Economics and Business Research, said Mr Bush would be able to act more decisively on economic matters after winning the popular vote.

Spending in the US was likely to be brought under greater control as political pressures ease, he said.

UK-based pharmaceutical companies GlaxoSmithKline and AstraZeneca were seen as beneficiaries of a Bush win, with the heavyweight stocks gaining 2% in London.

This was because Mr Kerry had promised extra legislation to help drive down the price of medicines and fulfil an election pledge to make healthcare cheaper.

Oil giants BP and Shell benefited from crude futures hovering around the 50 US dollars a barrel mark as traders believed there it was less likely that Washington will release some of its massive reserves to cool prices.

On the currency markets, the US dollar came under pressure against both the euro and the pound as Mr Bush is perceived to favour a weaker greenback as a means to trim the federal budget deficit.

Hilary Cook of Barclays Stockbrokers said: "The one thing the market did not want was no immediate result. On top of that, Bush was the preferred winner as he's viewed as the most business-friendly."