Uncertainties pull markets down

French election and Korean peninsula tension cause the fall

Stock indexes and the US dollar fell yesterday as a snap general election call in Britain added to a growing list of uncertainties for investors, including sabre-rattling in the Korean Peninsula and an election in France.

Disappointing quarterly results from corporate heavyweights Goldman Sachs and Johnson & Johnson dragged Wall Street lower.

“The key for the market is still earnings, economic growth etc, and politics is merely a daily side show,” said Paul Nolte, portfolio manager at Kingsview Asset Management in Chicago.

The Dow Jones Industrial Average fell 84.96 points, or 0.41 per cent, to 20,551.96, the S&P 500 lost 5.37 points, or 0.23 per cent, to 2,343.64 and the Nasdaq Composite dropped 10.19 points, or 0.17 per cent, to 5,846.60.

Pound strengthens

The pan-European FTSEurofirst 300 index lost 0.98 per cent and MSCI’s gauge of stocks across the globe shed 0.43 per cent. Emerging market stocks lost 0.55 per cent. MSCI’s broadest index of Asia-Pacific shares outside Japan closed 0.91 per cent lower, while Japan’s Nikkei rose 0.35 per cent. Sterling strengthened as British Prime Minister Theresa May called for an early election on June 8, saying she needed to strengthen her hand in divorce talks with the European Union.

Deutsche Bank said the surprise election call is a “gamechanger” for the currency, and that it will raise its forecasts for the pound in the coming days.