London stocks, pound dip as Britons vote | daily-sun.com

London stocks, pound dip as Britons vote

AFP     9th June, 2017 12:30:07 printer

London stocks, pound dip as Britons vote

LONDON: The London stock market and pound slid on Thursday, with investors nervous as Britons vote in a snap general election.

 

Contributing to a news-heavy day was also an ECB meeting at which the central bank hinted at the end of its easy monetary policy, describing a rosier outlook for the eurozone and dropping a long-standing commitment to cutting interest rates yet further if necessary, and a crucial testimony by sacked FBI chief James Comey in the United States.

 

"Super Thursday is finally here," said analyst Konstantinos Anthis at ADS Securities, referring to the key events on both sides of the Atlantic.

 

The British capital's FTSE 100 index, which initially rose and then eased back, ended the day with a loss of 0.4 percent. The pound also slid.

 

Britain's Conservative Prime Minister Theresa May is still set to beat main opposition Labour leader Jeremy Corbyn, despite a recent narrowing in the opinion polls.

Results are not due until early Friday.

 

"The UK stock market would prefer a Tory victory as the party is more in favour of free market economics than Labour," said market analyst David Madden at CMC Markets.

 

"The ground lost by the Conservatives in the past couple of weeks has rattled some traders," he added.

 

The election is May's first since taking office in July last year, after Britons voted by 52 percent to leave the European Union.

 

The premier called the election three years early in a bid to strengthen her slender majority going into Brexit talks, which begin on June 19, but some polls have suggested she may end up with a hung parliament in which the Conservatives would fall short of the 326 seats needed for a majority.

 

While the pound dipped on Thursday, it was still holding onto gains made after May called the early election.

 

"The pound's recent steady performance suggests a clear win for Theresa May is discounted," NFS Macro analyst Nick Stamenkovic told AFP.

 

"Indeed, the pound is vulnerable to a hung parliament or the outside risk of a Labour victory."

 

ECB dovish and hawkish

Meanwhile in the eurozone, Frankfurt stocks pushed higher while Paris was flat after the ECB decided, as expected, to keep its ultralow interest rates unchanged and said it would continue its 60-billion-euro ($67.4 billion) monthly bond purchases to December.

 

The central said it saw fewer risks to the eurozone economy as it increased its growth forecasts while cutting those for inflation.

 

The euro retreated against the dollar after the ECB's announcement.

 

"The central bank made every effort to retain a relatively neutral stance overall, balancing any hawkish or dovish statement with something roughly equal and opposite," said market analyst Craig Erlam at OANDA currency traders.

 

"The fact that it no longer expects interest rates to remain at present 'or lower' levels is a clear deliberate signal that policy makers are gradually becoming more hawkish and yet it also claimed that they could increase the asset purchase program or continue until the end of 2017, or beyond, if necessary," he added.

 

Comey revelations?

Investors remained on tenterhooks as Comey gave public testimony before a congressional committee, which could be damaging to US President Donald Trump and his economy-boosting agenda.

 

Wall Street stocks were stalled in late morning trading.

 

Comey said Wednesday that Trump had urged him to drop a probe into former national security advisor Michael Flynn. During his testimony on Thursday, Comey withheld judgment on whether this amounted to obstruction of justice.

 

In Asia on Thursday, Shanghai and Hong Kong led most markets higher after Chinese trade data beat forecasts.

 

Key figures around 1530 GMT

London - FTSE 100: DOWN 0.4 percent at 7,449.98 points (close)

 

Paris - CAC 40: FLAT at 5,264.24 (close)

 

Frankfurt - DAX 30: UP 0.3 percent at 12,713.58 (close)

 

EURO STOXX 50: UP 0.4 percent at 3,564.46

 

New York - Dow: UP 0.1 percent at 21,193.30

 

Tokyo - Nikkei 225: DOWN 0.4 percent at 19,909.26 (close)

 

Hong Kong - Hang Seng: UP 0.3 percent at 26,063.06 (close)

 

Shanghai - Composite: UP 0.3 percent at 3,150.33 (close)

 

Pound/dollar: DOWN at $1.2945 from $1.2962 at 2100 GMT on Wednesday

 

Euro/dollar: DOWN at $1.1220 from $1.1263

 

Dollar/yen: UP at 110.16 yen from 109.80 yen

 

Oil - Brent North Sea: DOWN 13 cents at $47.93 per barrel

 

Oil - West Texas Intermediate: DOWN 4 cents at $45.68


Top