London stock market wipes out initial gains, pound dips

LONDON: The London stock market and pound slid on Thursday, with investors nervous as Britons vote in a snap general election.

Contributing to a news-heavy day was also a meeting of the European Central Bank (ECB) at which the bank hinted at the end of its easy monetary policy, describing a rosier outlook for the eurozone and dropping a longstanding commitment to cutting interest rates yet further if necessary, and a crucial testimony by James Comey, former chief of the Federal Bureau of the Investigation, in the US.

The British capital’s FTSE 100 index, which initially rose and then eased back, ended the day with a loss of 0.4 percent. The pound also slid.

“The UK stock market would prefer a Tory victory as the party is more in favor of free market economics than Labour,” said market analyst David Madden at CMC Markets.

“The ground lost by the Conservatives in the past couple of weeks has rattled some traders,” he added.

While the pound dipped on Thursday, it was still holding onto gains made after Premier Theresa May called the early election.

“The pound’s recent steady performance suggests a clear win for Theresa May is discounted,” NFS Macro analyst Nick Stamenkovic said.

“Indeed, the pound is vulnerable to a hung Parliament or the outside risk of a Labour victory,” said the analyst.

Sterling had hit a two-week high of $1.2978 in morning trade in London after polling organizations’ last surveys, but slipped back later in the day to trade down 0.2 percent at $1.2939 by 1555 GMT.