UK currency and stock volatile

UK currency and stock volatile

The is a mixed picture for the UK currency pound sterling and an even more confusing outlook for the UK stock market following the announcement of a snap general election by the UK prime minister Theresa May. Full story below, story source is the BBC website:

The pound recovered strongly following the announcement by the Prime Minister Theresa May of a snap general election in June.

Earlier, sterling had fallen after it was announced that Downing Street would make a statement.

By about 12:30 BST, sterling was up nearly 1% at $1.267, while against the euro it was up 0.5% at 1.186 euros.

On the stock market, the benchmark FTSE 100 share index was down 116 points, or 1.6%, at 7,212.

Luke Bartholomew, of the investment firm Aberdeen Asset Management, said: “The election should hand Theresa May a much bigger mandate to stand up to the harder line, anti-EU backbenchers which currently hold a disproportionate sway over her party’s stance on Brexit.

“That would be welcomed by financial markets,” he added.

Neil Wilson, of the spread betting firm ETX Capital, said: “For investors [the snap election] adds another layer of complexity to an already uncertain picture for UK and European assets.

“Volatility is likely to remain elevated over the coming weeks.

“And as elections are so unpredictable, there is always the outside risk it could spark a reversal in the entire Brexit process,” Mr Wilson added.

Falling iron ore prices hit mining shares, with BHP Billiton down 3.2% and Anglo American dropping 3%.

Energy shares were also lower as the price of oil fell following news of rising US shale oil output.

BP shares were down 2.6%.

In the FTSE 250, Ladbrokes Coral rose 1.8% after analysts at Davy raised their rating on the firm to “outperform”.

Bovis Homes was another mid-cap company to benefit from a broker upgrade.

Shares in the housebuilder rose 1.1% after Jefferies raised its rating on the company to “buy”.