Business World

Saturday 21 October 2017

UK election weighs on European markets

British Prime Minister Theresa May makes a statement in Downing Street, London, announcing a snap general election on June 8. Photo: John Stillwell/PA Wire
British Prime Minister Theresa May makes a statement in Downing Street, London, announcing a snap general election on June 8. Photo: John Stillwell/PA Wire

UK Prime Minister Theresa May's announcement yesterday that a snap general election will be held in June was one of the main drivers of stock markets around Europe in an otherwise quiet post-Easter week.

European shares subsequently hit three-week lows in volatile trade while the looming first round of France's presidential election also weighed on investors' minds.

A rise in sterling after the election announcement depressed UK equities, though traders said that any weakness in the currency could benefit UK equities in the future.

"We are still bullish on UK equity markets," said John Moore, a trader at Berkeley Capital.

"If there is further uncertainty in the UK, we believe pound against the dollar will have a bit of a sell-off, and therefore ... the FTSE 100 will benefit from that due to the inverse correlation we've been experiencing for the last couple of months."

Ireland's ISEQ Overall Index edged 0.26pc lower, ending the session at 6,674.84. Movers included financial services group IFG, which jumped 5pc to €1.68. Its business is focused on the UK.

Shares in the recruitment firm CPL Resources rose 2.5pc to €6.00, continuing see-saw action the stock has seen recently.

Glanbia rose 1.9pc to €18.75 while insulation maker Kingspan fell 1pc to €29.16.

Irish companies listed in the UK fell.

Shares in Greencore dropped 2.9pc to £2.49. DCC fell 1pc to £70.65. UDG Healthcare rose 0.4pc, however.

The FTSE-100 ended the day almost 2.5pc lower. Germany's DAX slipped 0.9pc and France's CAC-40 was down 1.6pc.

Reuters

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