UK election boosts FTSE as sterling slide lifts UK exporters

The election upset for UK prime minister Theresa May sent Britain's major share index shooting up on Friday, feeding off a weaker currency, while housebuilders suffered losses as uncertainty about the UK's leadership grew before Brexit negotiations.

European stocks were choppy after the UK’s election delivered no clear winner on the eve of Brexit talks.

A drop in technology stocks on Friday dragged Wall Street away from the record highs it hit earlier in the session, helped by gains in bank stocks.

The Iseq in Dublin rose marginally, up 0.18 per cent.

Sterling falls sharply following UK election result

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Pound falls sharply as hung parliament looms in UK

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Sterling: more pain for exporters, but it could have been worse

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A not-so-super Thursday of trading on European stock markets

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DUBLIN

Paper and packaging group Smurfit Kappa was among the best performers on the Iseq on Friday, up 3.5 per cent to close the session at €25.83. The stock, which was also among the best performers on the booming FTSE 100, was also boosted by an increase in kraftliner prices.

Some other Irish stocks with significant exposure to – or operations in – the UK finished the day in the red. Ryanair was down more than 0.8 per cent, Irish Ferries owner ICG was down 1.3 per cent, while Paddy Power Betfair was down 0.2 per cent.

C&C, however, finished up more than 1.1 per cent, shrugging off the effects of the British uncertainty.

LONDON

Sterling fell as much as 2.5 per cent, which in turn gave a strong boost to British companies which sell outside their country, boosting the FTSE by more than 1 per cent.

Among them were miner Antofagasta, bank Standard Chartered and oil major BP, all up between 2.5 and 5 per cent. In turn, companies that make most of their revenues in the UK were hit, with Lloyds Bank down 1 per cent and supermarket Marks & Spencer down 1.8 per cent.

Utilities including Centrica and SSE all rose before trimming gains as prospects of a hung parliament diluted risks of harsher regulation – the Conservatives and Labour party have both proposed tariff caps.

Stocks linked to the British housebuilding industry were the biggest fallers. Builders merchant Travis Perkins fell 3 per cent, Howden Joinery dropped 2.8 per cent and housebuilder Berkeley Group was down 3.6 per cent. UK travel stocks and pub companies also fell, while the domestically exposed FTSE 250 index recovered to end 0.1 per cent higher.

EUROPE

The pan-European STOXX 600 index ended the session 0.3 per cent higher, having moved in and out of positive territory throughout the day.

The FTSE 100’s European counterparts also ended the day higher, with the French Cac 40 up nearly 0.7 per cent and the German Dax up 0.8 per cent.

Italian bank UBI Banca rose 3.5 per cent, among top gainers on the STOXX, as investors were upbeat about a possible rescue of two troubled regional lenders. Traders also cited an upbeat note from local broker Equita which upgraded the stock to "buy", saying that the market had underestimated the benefits of an acquisition.

Basic resources stocks also gained as copper prices rose, helped by supply concerns in Chile and recent data pointing to robust import demand from China.

NEW YORK

An abrupt sell-off in technology stocks that started around midday in New York trading dragged the S&P 500 technology sector down as much as 4.2 per cent on Friday in its biggest fall since the day following last June’s Brexit vote.

An hour before the close of trading, Apple was down 4.4 per cent, Microsoft lost almost 4 per cent, Facebook was down about 4 per cent, Alphabet was down 3.7 per cent, and Netflix was sitting 5.4 per cent lower. Nvidia – which saw a 7 per cent rise a day earlier – was off 8 per cent.

The Nasdaq 100 index was down about 2 per cent on the day, having recovered slightly after being down almost 3 per cent.

The Dow got a boost from Goldman Sachs' 1.8 per cent gain, while a more than 2 per cent rise in JPMorgan and Bank of America helped lift the S&P 500. The financial index's 1.7 per cent rise topped the gainers among the 11 S&P 500 sectors, followed by a 1.6 per cent gain in energy on the back of higher oil prices.

Chipmaker Nvidia rose 2.6 per cent after brokerages reiterated their bullish view on the stock. The stock was the biggest boost on the Nasdaq. DuPont Fabros Technology jumped 13 per cent to $62.55 after Digital Realty Trust said it would buy the fellow data centre operator for an enterprise value of about $7.6 billion.

– (Additional reporting: Bloomberg/Reuters/PA)