London stocks seen muted as Britons head to polls
The London stock market slowed down on Thursday, bucking an upwards trend across Europe, with investors nervous as Britons vote in a snap general election.
Konstantinos Anthis analyst at ADS Securities said Super Thursday is finally here and traders are ready for unpredictable day with important events in Europe and the United States.
The British capital’s FTSE 100 index turned flat heading into midday, wiping out initial gains, while the pound edged lower against the dollar with voting underway. In the Eurozone, Frankfurt and Paris rebounded somewhat before a hotly-anticipated European Central Bank policy announcement. All eyes will be on ECB chief Mario Draghi to see whether he signals an exit from its easy-money policy.
Most observers predict however that the bank’s 60-billion-euro ($67.4 billion) monthly bond purchases will continue and interest rates will remain at historic lows.
Nick Stamenkovic NFS Macro analyst said Britain’s Conservative Prime Minister Theresa May is still set to beat main opposition Labour leader Jeremy Corbyn, despite a recent narrowing in the opinion polls. Results are not due until early Friday. Some traders remain anxious over the possibility of a hung parliament, in which the Conservatives would fall short of the 326 seats needed for a majority.
“The pound’s recent steady performance suggests a clear win for Theresa May is discounted,” Stamenkovic added.
“Indeed, the pound is vulnerable to a hung parliament or the outside risk of a Labour victory.”
The election is May’s first since taking office in July last year, after Britons voted by 52 percent to leave the European Union.
The premier called the election three years early in a bid to strengthen her slender majority going into Brexit talks, which begin on June 19.