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ASX 200 to dip; Aussie rises, UK Labour victory anticipated

Published 05/07/2024, 09:14 am
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Investing.com - Australian shares are expected to experience a minor dip at Friday's open, while the Australian dollar rose to its highest level since January 2.

With Wall Street on a holiday for Independence Day, attention shifted to European shares. The FTSE 100 index in the UK rose by 0.9%, driven by the anticipation of Labour's sweeping majority in the parliamentary elections. Exit polls projected Labour securing 410 seats, resulting in a 170-seat majority.

Medical equipment manufacturer Smith & Nephew (LON:SN) led the FTSE's surge, with a 6.8% increase in share price. This follows the disclosure of a 5% stake acquisition by activist investor Cevian Capital.

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The yield on the UK's 10-year note rose by 3 basis points to 4.20%. Comparatively, the yield has increased by 2 basis points in the past month and decreased by 21 basis points over the past year.

France's stock market also saw a 0.8% rise for the second consecutive day. This can be attributed to the intensified efforts to keep France's National Rally (RN), a far-right party, from assuming power. An opinion poll indicated that the RN is predicted to lack an absolute majority in the upcoming second round of the parliamentary election.

Iron ore futures have reached a nearly month-high level, driven by optimism about potential demand improvements from China. According to Chaos Ternary Research Institute, steel mills maintain a high demand for iron ore due to high furnace run-rates and a recent surge in steel demand.

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