Trump victory: what British investors bought and sold in the first hours of trading

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Private investors rushed to log on to their broker accounts in the first hours of Wednesday trading, but those who hoped for bargains on a post-Brexit scale were disappointed.

Activity was “unusually high” but “not frenetic”, brokers said.

At AJ Bell, the trading platform, transaction volumes were three times their average in the first hour of trading. Following Brexit, the firm had experienced trading volumes five times higher than usual.

At TD Direct Investing volumes were four times average levels – again some way behind the firm’s experience on June 24, the day after the EU referendum.

Barclays Stockbrokers said volumes had doubled, with two thirds of trades being purchases.

As with post-Brexit trading, however, private investors were generally contrarian: buying into the biggest fallers and taking profits in those sectors – gold-related stocks in particular – that showed dramatic early gains.

For example, early buying at TD Direct focused on Lloyds Banking Group, a persistent favourite on savers’ buy lists. The company accounted for almost 4pc of all TD’s trades and 60pc of those transactions were purchases. Lloyds shares were down by almost 2pc at certain points within the first hour.

Brokers reported that some clients had built up cash reserves ahead of the day, presumably in the hope that a Trump victory would present the opportunity of a Brexit-style indiscriminate sell-off. Despite opening volatility this sell-off did not materialise, however.

This was largely because Donald Trump’s acceptance speech coincided with the opening of London and European markets and swiftly soothed them. TD Direct’s chief executive, Michelle McGrade, said his speech’s “unexpectedly conciliatory and pro-growth, partnership-focused” tone arrested any violent falls in the market – and was rapidly interpreted as a support to certain sectors, if not the market as a whole.

Within an hour of opening the FTSE 100 had recovered close to its opening level – and the FTSE 250 index of mid-sized British stocks was trading up for the day.

Instead private clients took the opportunity to pocket profits. Selling was concentrated around the big risers, including Centamin, the gold miner, whose shares leapt by 7pc in early trading – and where 75pc of TD clients’ transactions were disposals.

Randgold Resources, whose shares gained 6pc within the first 30 minutes of trading, also saw a high level of selling, as did Glencore, 2pc higher.

Ms McGrade said she expected buyers to return to these sectors, however.

“We are back to asking the question of where now do you look for opportunities? This election hasn’t delivered any stand-out opportunities, and I think we will see attention come back to commodities and to banks, both of which benefit from growth.”

There was selling in other areas, however, including sectors such as pharmaceuticals, where the wider market was also pushing down prices. GlaxoSmithKline was among TD’s 10 most traded stocks but nine in 10 trades were sales. The shares fell sharply but then rebounded, posting gains of 2pc by mid-morning.

At AJ Bell the most-bought stocks also included Lloyds.

A spokesman for the broker said there were more buyers than sellers in the market – but not at the extreme ratios witnessed in the days following Brexit.

“Since 2009, buying on the dips has proved to be a successful trade, although at times you’ve needed very strong nerves,” he said.  “So far it has proved to be the correct thing to do.”