Financial markets still affected by UK election concerns

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By Euronews
Financial markets still affected by UK election concerns

There was still a lot of volatility in the financial markets on Wednesday after the surprise general election announcement by Britain’s prime minister.

Europe’s major stock markets ended the day higher, recovering on Wednesday from their biggest one-day loss in five months.

A rebound in banking stocks and some positive first-quarter company results outweighed weakness in oil and gas shares.

London’s FTSE 100 index, which lists the biggest firms, fell 0.46 percent, but the wider ranging FTSE 250 index of medium-sized companies’ shares gained 0.6 percent.

Investors remain edgy. Laith Khalaf, Senior Analyst with Hargreaves Lansdown, asked about the UK economic outlook, said: “ It is very difficult to pinpoint at this stage because we don’t know what’s going to happen in the election. If you look at what is expected at the moment, a stronger Conservative government, then actually I think markets would probably react quite positively to that. But I think there is still a lot of electioneering to go, and the one thing that we have learned recently is not to predict the outcome of political events.”

He added: “As we know, polling is not an exact science and there are probably many spills and thrills to come over the next six to seven weeks or so.”

Uncertainty was also the problem for the currency, the pound, depending on how Britain’s negotiations to leave the European Union go and what effect that has on the UK economy.

Sterling had surged to a six-month high against the US dollar on Tuesday but towards the end of trading in London on Wednesday it slipped.

The shares of bigger British companies are vulnerable to a rising pound because more than two-thirds of FTSE 100 company earnings are derived from operations overseas.