London stocks closed lower on Monday as new Prime Minister Andy Burnham delivered his first speech and began reshaping his top team at Westminster.
The FTSE 100 (^FTSE) ended the session down 75.61 points, or 0.7%, closing at 10,524.76, while gilt yields climbed in response to the political transition.
The FTSE 250 fell 64.12 points, or 0.3%, to finish at 23,540.71, and the AIM all-share closed down 1.42 points, or 0.2%, at 757.89.
European markets fared better, with the CAC 40 in Paris closing slightly higher and Frankfurt’s DAX 40 ending up 0.1% on the day.
Sterling dipped against the dollar, falling to 1.3418 from 1.3453 at Friday’s equities close, while the pound was little changed against the euro at 1.1755.
David Lammy, Rachel Reeves, and Steve Reed were among the first high-profile Cabinet ministers to be shown the door by Mr Burnham on his opening day in office.
Ms Reeves posted on X: “It has been the privilege of my life to serve as the Chancellor of the Exchequer. The economy today is stronger, fairer and more resilient because of the choices we have taken as a Labour government over the past two years.”
Mr Reed, regarded as a close loyalist to Sir Keir Starmer, said he was “disappointed to be leaving government now” in a letter addressed to Mr Burnham.
Speaking without the lectern used by his predecessors, Mr Burnham pledged to win over voters “fed up with politics” and promised to show the world the UK can be a source of stability once again.
Mr Burnham told reporters: “I’ve said we’ll stick to the fiscal rules, and by that I mean the existing fiscal rules, and use obviously any flexibility within them.”
The UK 10-year gilt yield widened to 5.04% on Monday afternoon from 4.97% late on Friday, reflecting market sensitivity to the new government’s fiscal positioning.
In his first promise as Prime Minister, Mr Burnham said he would “end rough sleeping in our country”, with further measures on the cost-of-living to be announced starting Tuesday.
On the FTSE 100, Computacenter led gains, closing 5.6% higher after Berenberg raised its rating on the stock to ‘buy’, citing strong momentum in North America and the UK.
Berenberg said: “While the shares have already performed outstandingly since the H125 results in September, we think Computacenter can still meaningfully beat current consensus profit estimates.”
Ryanair shares fell 4.6% after the Dublin-based budget carrier reported a 34% decline in profit after tax to 538 million euros in the three months to June 30, missing company consensus of 579 million euros.
Chief executive Michael O’Leary said fares required “stimulation” during the quarter as the Middle East conflict led to “consumer hesitancy, concerns about EU jet-fuel shortages, economic uncertainty and later bookings.”
On the FTSE 250, Big Yellow Group shares finished 0.3% lower after reporting a “resilient performance” in the first quarter, with total revenue rising 3.3% to £53.2 million.
Big Yellow chief executive Jim Gibson said: “We recognise that the operating environment may continue to be challenging in the months ahead, given the current fiscal and budgetary uncertainties, which will likely not be clarified until the autumn.”
On AIM, Sunrise Resources shares surged 11% after the industrial mineral projects developer announced a new copper-silver-gold project in Nevada’s Lake Mining District in Churchill County.
Brent crude rose to 88.07 dollars a barrel on Monday afternoon from 86.53 dollars late Friday, while gold edged slightly lower to 4,011.08 dollars an ounce.