FTSE 100 sheds 2.5% on UK election sterling rally

By John Kenchington

Added 19th April 2017

The FTSE 100 index suffered its worst fall since the aftermath of Brexit yesterday, after Prime Minister Theresa May called a snap general election.

FTSE 100 sheds 2.5% on UK election sterling rally

The index plunged as markets weighed up the threat of the sharp rise in sterling, resulting from the election announcement, would reduce overseas demand for British exporters.

Sterling rocketed as polls suggested the Conservatives would win the 8 June election in a landslide and gain a large majority in parliament – enough to drive home the UK’s Brexit negotiations successfully.

The currency rose to four-month highs against the dollar in the wake of the election calls. The prime minister requires a Parliamentary vote to call an election on 8 June but this is widely expected to pass.

Kames Capital chief investment officer Stephen Jones said sterling was a barometer of sentiment and its rise suggested the market welcomed the election, in spite of the equity fall.

“An assumed new full-term of a government, with a clear mandate around Brexit, a pro-business agenda and some fiscal caution seems to play well,” he said.

He added it was “not surprising” major exporters on the FTSE 100 had fallen in response to the sharp rise in sterling.


Overseas earners will be key amidst 2017 inflation

Sponsored by Neptune

Overseas earners will be key amidst 2017 inflation...

A by-product of sterling weakness is inflation, and we expect this to continue to gather steam over the coming months, with energy and food prices the hardest hit....

Kames Income Hub


Vincent McEntegart, manager of the Kames Diversified Monthly Income Fund, explains how he aims to deliver a stable and sustainable income of 5% p.a.*, paid monthly, by investing in a range of asset classes

Square Mile Research

AXA Distribution Fund
AXA Distribution Fund

Talking Factsheets is a video service for users...

Visitor's Comments Add your comment

Add Your Comment

We won't publish your address



Investment Strategy




PA Alternative Ucits 2017 Congress
PA Alternative Ucits 2017 Congress

Tuesday 25 April
The Langham, London

PA Europe 2017
PA Europe 2017

Thursday 11 May
Furniture Makers' Hall

PA Channel Islands 2017
PA Channel Islands 2017

Wednesday 24 May
Royal Yacht Hotel, Jersey

PA UK Equity 2017
PA UK Equity 2017

Thursday 15 June
Radisson Blu Edwardian Bloomsbury Street Hotel

Sponsored Content

Investment Strategy