The FTSE has opened positively this morning following the hung parliament result from the UK General Election. The bourse is up almost 1% in early trading.
Accendo Markets Analyst, Mike van Dulken commented “Whilst this [election result] means uncertainty about the UK economy and of course Brexit negotiations, the index’s international exposure means it benefits from a FX translational standpoint.”
“The prospect of a softer Brexit stance due to a coalition is also helping. Stocks in focus today will be Financials, Miners and Housebuilders.”
“Traders immediately indicated their nervousness by selling the pound” added ADS Securities Analyst, Konstantinos Anthis, “which initially dropped 2%. The outlook for the Sterling is bearish at this time, investors will limit their exposure to the UK currency at least until it becomes clearer what type of government will be formed.”
In central Europe the ECB aggressively reduced its inflation forecasts for 2017-2019. Konstantinos Anthis suggested “The fact that Draghi cited lower energy prices as the reason behind the slower inflation growth can be taken as a positive as it attributes the problem to a market phenomenon rather than fundamental or structural problems of the Eurozone economy. ”
Across the Atlantic, the US bourses closed marginally higher on Thursday having retreated from session highs during ex-FBI chief Comey’s testimony.
Mike van Dulken added “The Dow Jones traded a fresh all-time high during his appearance on Capitol Hill, however pared gains to close just above break-even. The S&P500 followed a similar trend, with Financials leading the index less than one point higher, while the Nasdaq outperformed on account of its Tech-heavy make up as investors eye growth stocks”