Pharmaceuticals, biotech, oil & gas and defence shares stood out as the market got to grips with the victory of Republican presidential candidate Donald Trump.
Initial sell-offs on Asian bourses and a drop in oil were pared back throughout the day, but sectoral movements within the UK market point to an early view about which types of businesses could flourish under president Trump.
One sector that was actively relieved was pharmaceuticals, which had been worried about a Hillary Clinton win given her proposal to allow Medicare as a whole to negotiate drug prices. Broker Liberum predicted that this would knock 7-8 per cent off company earnings, which is perhaps why the four big pharma stocks on the FTSE 100 rose between 2 and 8 per cent in early trading. British drugs makers, including rare disease specialists Shire (SHP) and Hikma (HIK), were buoyed and fund managers called the result a "major positive" for the sector.
Concerns remain, though, given the potential for massive upheaval in the US healthcare system and Mr Trump's threats to "completely repeal Obamacare". As the Republicans have retained hold of the Senate, this policy could well come to pass.
Some of Britain's defence companies also reacted positively given Mr Trump's suggestions during his campaign that he wanted European allies to spend more on defence. Investors in BAE Systems (BAE) seem to think this could be a reality, with the stock up nearly 7 per cent on election results day.
Construction was the only industry mentioned in Mr Trump's victory speech. After promising to "rebuild the nation's infrastructure", UK constructors with operations in the US, including Ashtead (AHT) and CRH (CRH), had a great morning.
It isn't all bullish, though. Gold prices had risen 2 per cent at the time of writing, although the gains had been higher earlier in the day. Gold is considered a safe-haven asset and the rise in the precious metal's price heaved with it some of the FTSE's miners. At one point, Acacia (ACA) and Fresnillo (FRES) were leading the FTSE All-Share.
And after an early downturn in the price of Brent crude, UK oil and gas giants Shell (RDSB) and BP (BP.) fell. The share prices of the major UK-listed banks initially also fell on suggestions the US Federal Reserve might have to delay its planned increases to interest rates. Lower-for-longer rates have weighed on banks' profitability. The sector's shares rose later in the day.
On a longer-term note, potential downside investment risks include increased trade protectionism, anti-immigration measures which could impact the remittances foreign workers in the US send home, large fiscal expansion and a steepening of the US yield curve.
