London Markets: Sterling slumps on British election uncertainty

London Markets: Sterling slumps on British election uncertainty

12 Dec    Finance News
AFP via Getty Images
U.K. Prime Minister Boris Johnson poses with his dog Dilyn as he leaves a polling station.

Sterling slumped on Thursday on uncertainty over the December 12 general election.

The pound GBPUSD, -0.1819%  traded as low as $1.3118 from $1.3195 on Wednesday, as traders anticipate whether the Conservatives will secure a majority in Parliament or not.

It has climbed nearly 7% over the last three months in anticipation a Conservative-led Parliament can push through legislation agreed with the European Union to exit.

On the Betfair betting market, the odds were pointing to the Conservatives winning, though they were moving throughout the day. The market will be better informed when exit polls are released at 10 p.m. local time, or 5 p.m. Eastern.

Some of the later polls in the cycle showed the Conservatives falling below the 7-point lead that most analysts say is needed to avoid a hung Parliament. It isn’t obvious what governing coalition could be formed, by either the Conservatives or Labour, in such a situation.

The FTSE 100 UKX, +0.28%  meanwhile was buoyed by sterling weakness, as it added 0.48% to 7251. Many of the top companies in the FTSE 100 generate the bulk of revenue outside of Britain, so their stock prices rise when sterling falls.

Balfour Beatty shares BBY, +3.56%  rose 4% as the U.K.-based construction contractor said its order book will surpass £14 billion and that its profit from operations will be “slightly ahead” of expectations. Analysts at Liberum Capital said one positive was that the company’s Hong Kong joint venture hasn’t been negatively affected by civil unrest.

See also  Holiday Inn hotels hit by cyber-attack

Leave a Reply

Your email address will not be published. Required fields are marked *