Joshua Mahony MSTA
Scope Markets
The FTSE has suffered a day of substantial losses, as the rising pound has hit hit UK stocks in the wake of Theresa May’s decision to call a general election
- FTSE tumbles after general election is called
- Ire ore prices drag miners to bottom of the pile
- General election to be dominated by Brexit considerations
The FTSE looks set to suffer its worst day of trade in three months, after Theresa May called an impromptu election for early June. Crucially, while we saw the initial losses in the pound reversed sharply, that rise in sterling only served to deepen the losses evident in UK stocks.
Incredibly, on a day where the UK stocks are suffering so heavily, it is not the announcement of a general election which has caused the biggest losers, but instead the falling price of iron ore, which has dragged the likes of BHP Billiton, Anglo American and Glencore to the bottom of the pile.
The decision from Theresa May to call a general election in June came from left-field, given her previous desire to reject any suggestions to do so. On the face of it this is about strengthening her negotiating hand ahead of the Brexit discussions. Certainly this general election is expected to be fought on Brexit grounds, with the Hard-Brexit (Tories), Soft-Brexit (Labour) and anti-Brexit (Lib Dems) all likely to be offered. Meanwhile, there will be a significant focus on the direction taken by Scottish voters, given that any SNP gains or losses would be taken as being indicative of a shift in the desire for independence from the United Kingdom.
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