Surging pound takes its toll on the FTSE 100
The FTSE 100 has closed down 2.3% today, its worst day since the immediate aftermath of the Brexit vote last June.
The headline index has been pushed lower by a surging pound, which has risen by around 1.6% today (4.45pm). Falling iron ore, oil and gas prices have also weighed down on some of the heavyweights of the UK stock market, with Royal Dutch Shell, Rio Tinto and BP all down around 3-4%; BHP Billiton and Glencore are trading 5.6% down on the day.
Laith Khalaf, Senior Analyst, Hargreaves Lansdown:
"Currency markets have roared their approval for a snap UK election, with the pound enjoying strong gains against the dollar and the euro.
The fall in the stock market is not a negative response to the UK election per se, rather it is a knock on effect of a surging pound, combined with price falls in some key commodity markets, all of which has taken its toll on the heavyweights of the FTSE 100 index.
Indeed most major stock market indices are in the red today, with tensions in the far east and the forthcoming French election just two factors contributing to a risk-off environment.
The EU referendum provides a clear blueprint for why investors shouldn’t shape their portfolios according to proceedings at the ballot box. Not only was the result of the vote a surprise, the effects on financial markets were too, so investors would be best served by keeping politics out of their portfolios."