FTSE 100 Holds Firm as Election Ends With Hung Parliament
A hung parliament was declared in the U.K. general election which resulted in some wild swings overnight for the FTSE 100.
After ending slightly down on Thursday, the main share index was priced by spread betting companies as down 100 points as the exit polls were announced.
During the early hours, one by one the results came in and the overnight price gradually began to recover. When it became apparent that the Conservative party would continue to hold the most seats and have the ability to form a coalition Government, the FTSE 100 price jumped when the market opened and headed toward the weeks highs.
And there it stayed, pretty much.
For the rest of the trading day the index held tight in a 50 point range from 7480 to 7530, give or take a few points.
Relief all round for investors who would have taken a Corbyn victory as a signal to sell, with extreme uncertainty in the city about how his Labour Government and their policies would affect business growth.
As for individual sectors, the majority were buoyed by the result and finished positive. The main laggards were general retailers and food producers, as the value of sterling declined – pointing to imports become more expensive.
The British Pound fell 300 pips overnight when exit polls were announced but managed to recover a small piece of ground during the morning session in Europe.
Further pressure is expected for sterling over the coming days. Once again uncertain times in the U.K. are on the horizon, with Brexit talks about to begin and no Government yet in place to move the process forward.
One thing is for sure- it’s never dull for long on the UK markets!
Pete Southern is an active trader, chartist and writer for market blogs. He is currently technical analysis contributor and admin at this here blog.
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