Friday, 9 June 2017

Election 2017: Pound falls sharply but UK shares rise

The pound has fallen sharply after the UK election resulted in a hung parliament.

Sterling's value had dropped overnight, and as trading got under way in London it slipped further, standing 2% lower at about $1.27, with markets worried about continued political uncertainty.

Against the euro, the pound was down 1.7% at 1.1350.

However, shares were higher with the benchmark FTSE 100 index up 0.9% at 7,515.31.

A fall in the value of the pound tends to boost the FTSE 100 as the majority of companies in the index have significant operations overseas. A weaker pound means profits earned abroad are worth more when converted back into sterling.
International giants such as GlaxoSmithKline and Diageo were among the strongest risers, up more than 2%.

But shares in companies that make their money in the UK were shaken by the result.

Housebuilders saw falls of up to 5%, while retail companies' shares also fell as a weaker pound makes imported goods more expensive.

BBC    News.