LONDON MARKETS: FTSE 100 Ends Choppy Day In The Red, Amid Election Jitters

By Sara Sjolin, MarketWatch Features Dow Jones Newswires

Tesco falls after data show loss of market share

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U.K. stocks erased earlier firm gains and ended the session slightly lower on Wednesday, as nerves ahead of next week's general election sparked some selling.

The FTSE 100 index fell 0.1% to close at 7,519.95. For May, the U.K. benchmark ended 4.4% higher, its biggest monthly advance since December last year.

The benchmark traded firmly higher and reached an intraday record earlier on Wednesday as the pound stumbled to as low as $1.2770 from $1.2860 late Tuesday in New York. The loss came as a YouGov estimate, reported by The Times newspaper, indicated that the Conservatives might lose 20 seats in the June 8 election. That means May's party would lose its current majority in parliament (http://www.marketwatch.com/story/theresa-may-could-lose-majority-in-uk-election-fresh-research-finds-2017-05-31), which is has had since the election in 2015.

Labour, on the other hand, is expected to gain 28 seats. A few weeks ago, the Tories stood to increase their majority substantially and bag a landslide victory. Investors had been pushing the pound above $1.30 on hopes a bigger Conservative majority would strengthen May's hand in the coming Brexit negotiations with Brussels.

The YouGov research "distracts from the many [other polls] showing that a Conservative majority remains the most likely outcome, as is our base case. With no further indications of a hung parliament, the recent fall in sterling may be seen as a buying opportunity for investors (http://www.marketwatch.com/story/dont-dump-the-british-pound-buy-it-ubs-says-2017-05-31)," said Geoffrey Yu, head of the U.K. investment office at UBS Wealth Management, in a note.

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The pound buying already came later on Wednesday, rising to $1.2921 after two fresh polls showed the Conservatives were still in the lead. A Kantar poll put May's party 10 points head, while a Panelbase survey gave her a 15 point advance.

"Get used to this. The pound is going to be very volatile and headline-driven in the coming days until the election is out of the way," said Fawad Razaqzada, market analyst at Forex.com.

"If new polls show support for Theresa May is falling then the pound could fall once again, and vice versa. It is as simple as that. Thus, U.K. data should continue to play second fiddle to politics until the elections are over," he added.

Movers: British Airways-parent International Consolidated Airlines Group SA (IAG.LN) (IAG.LN) fell 0.3%, building on a 1.4% loss on Tuesday that came after a far-reaching computer failure at BA left thousands of passengers stranded over the weekend.

Read:The bill for British Airways's IT carnage? $111 million, Citi estimates (http://www.marketwatch.com/story/the-bill-for-british-airwayss-it-carnage-111-million-citi-estimates-2017-05-29)

Miners declined after China's official manufacturing purchasing managers index was unchanged in May at 51.2 (http://www.marketwatch.com/story/chinese-factory-activity-holds-steady-in-may-2017-05-31). China is a major user of natural resources, so any growth indications from the country tend to drive prices of metals.

Shares of Rio Tinto PLC (RIO) (RIO) (RIO) dropped 2.5%, Anglo American PLC (AAL.LN) fell 2.3% and BHP Billiton PLC (BLT.LN) (BHP.AU) (BHP.AU) lost 2.5%.

Randgold Resources Ltd. (RRS.LN) (RRS.LN), however, added 2.8% as gold prices rose.

Also moving lower, shares of Tesco PLC (TSCO.LN) (TSCO.LN) gave up 0.9% after the latest Kantar data on U.K. supermarkets showed the grocer's market share fell to 27.8% in the 12 weeks to May 21, from 28.3% in the previous period.

J Sainsbury PLC's (SBRY.LN) (SBRY.LN) market share fell to 15.9%, but shares ended up 0.5%.

(END) Dow Jones Newswires

May 31, 2017 12:00 ET (16:00 GMT)