FTSE 100 Slips as UK Government Uncertainty Continues

The FTSE 100 slipped on Monday, as investors remained uncertain about the status of the political landscape in Britain. The Conservative party has failed to secure a majority, and is now being forced to look to other parties to form a coalition government.

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shareprices.com - Monday, June 12, 2017

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The FTSE 100 is down by 0.2 percent today, having fell for five out of the last six sessions. The index gained one percent on Friday, thanks to a slip in the value of the pound, as Theresa May filed to expand the Conservative party’s majority in the House of Commons. The FTSE 100 tends to inversely track the value of the pound, because so many of the companies in the index take their earnings in dollars.

The pound slipped again on Monday, but the slip was not enough to offset the poor general mood of investors. It did help to offset some of the losses, but analysts expressed concern that the election outcome could hamper Brexit negotiations, and that this would increase the fiscal risk, and could have a negative impact on the credit profile of the UK.

The pound is down to $1.2655, in the wake of the general election. While some companies, such as Royal Dutch Shell and Johnson Matthey PLC made strong gains, as did Tesco PLC, there were far more losers across the board. The poorest performers of the day included Micro Focus International, and Sage Group, which were both victims of an abrupt sell-off of tech stocks in Wall Street on Friday.

 

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