British pound tumbles as poll adds to uncertainty
June 10 2017 12:04 AM
BRITISH
An employee removes 20 sterling pound notes from an automated currency counting machine in London. Sterling slumped to a seven-week low of $1.2636 yesterday.

AFP/London

The pound plunged yesterday as Prime Minister Theresa May’s Conservatives lost their parliamentary majority in Britain’s general election, fuelling political uncertainty just days before the start of Brexit talks, but Wall Street shot to record highs as Donald Trump hit back at his critics.
Sterling slumped to a seven-week low of $1.2636, while the euro reached a seven-month peak at 88.59 pence.
However, that propelled the London stock market higher as the weaker pound boosts multinational companies that earn in currencies other than sterling. The FTSE 100 closed 1.0% up at 7,527.33 points.
Investors also brushed off news of a monthly rise in industrial output.
May had called Thursday’s snap vote in a bid to boost her Conservative party’s hold over parliament and give her a stronger hand in upcoming talks with EU leaders over the country’s detachment from the bloc. But leftist Jeremy Corbyn’s Labour Party slashed the Conservatives’ lead, leaving the country with a hung parliament.
That means that no single party has the 326 seats required for an absolute majority.
May’s Conservatives will now rely on the support of Northern Ireland’s Democratic Unionist Party (DUP) for a working majority.
“The FTSE was up as sterling fell after the Conservatives lost their majority in the Commons,” said Russ Mould, investment director at stockbroker AJ Bell.
“Prime Minister Theresa May’s gamble on a snap election to give her a strong mandate for Brexit talks failed, casting a pall of uncertainty over the forthcoming negotiations.”
With one constituency still to be declared, the Conservatives were on 318 seats — down from 331 at the 2015 general election — while Labour was on 261, up from 229.
“In many ways a hung parliament is the least market-friendly result because it creates uncertainty and could be the biggest delay to the start of Brexit negotiations,” said market analyst Jasper Lawler at London Capital Group.
The election outcome throws Britain once again into upheaval less than a year after the country’s decision to leave the EU, which had already led the pound to collapse about 15% against the dollar between June and October 2016.
Elsewhere yesterday, French and German equities also advanced after a broadly positive session in Asia. Paris’ CAC 40 closed 0.7% up at 5,299.71 points, Frankfurt’s DAX 30 closed 0.8% up at 12,815.72 points and the EURO STOXX 50 ended 0.5% up at 3,583.04 points.
Meanwhile, Wall Street’s main stock indices hit record highs as investors shrugged off the dramatic congressional testimony of sacked FBI boss James Comey on Thursday in which he said President Trump asked him to drop a probe into former national security advisor Mike Flynn.






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