British benchmark had opened higher after weekend terror attack
U.K. stocks finished in negative territory Monday, weighed down by a gain in the pound after a fresh poll signaled a double-digit lead for the governing Conservative Party as a general election nears.
Continue Reading Below
A terror attack in London over the weekend added to the uncertainty around Thursday's parliamentary vote, but the Guardian/ICM poll out Monday suggested a change in government is unlikely.
The FTSE 100 fell 0.3% to close at 7,525.76, while sterling (http://www.marketwatch.com/story/pound-slips-against-dollar-in-wake-of-london-attack-2017-06-05) traded at $1.2930, up from $1.2891 late Friday in New York.
Earlier Monday, the FTSE had been edging higher, while the pound dropped.
The new survey (https://www.theguardian.com/uk-news/live/2017/jun/05/london-attack-isis-claims-responsibility-victims-named-live-updates?page=with:block-593519e8e4b0bdd87e2f36e2#block-593519e8e4b0bdd87e2f36e2) had the Tories enjoying a 11-point lead over the Labour Party.
"That's one of the biggest gaps that we've seen for a while," said Jasper Lawler, senior market analyst at London Capital Group. The poll looks like the dominant factor in U.K. markets on Monday, Lawler added.
The pound is "expected to remain volatile this week against the backdrop of the tragic weekend events in London and the flakiness of the polls in predicting what the outcome of Thursday's general election vote is likely to be, with the poll gaps varying between 1 and 12 points in favor of the Conservatives," said Michael Hewson, chief market analyst at CMC Markets UK, in a note.
The FTSE 100 tends to get hurt by a rallying pound, as the stronger currency cuts into the foreign-denominated profits made by the index's multinational companies.
On Saturday, attackers with a van mowed down (http://www.marketwatch.com/story/london-bridge-nearby-market-hit-by-violent-attacks-at-least-1-dead-2017-06-03) pedestrians at London Bridge, then got out and began stabbing bystanders in nearby Borough Market. Police moved quickly and killed the attackers, but seven people died in the rampage and dozens were injured, 21 of them seriously.
Read:5 things to know about the U.K.'s general election next week (http://www.marketwatch.com/story/5-things-to-know-about-the-uk-general-election-next-week-2017-06-01)
And see: U.K. election--the worst, best and most-likely scenarios for stocks (http://www.marketwatch.com/story/uk-election-the-nightmare-best-case-and-most-likely-scenarios-for-stocks-worldwide-2017-06-01)
Police have arrested 12 people in raids (http://www.marketwatch.com/story/police-arrest-12-in-london-raids-after-terror-attack-2017-06-04) prompted by the attack, which interrupted the campaigning for the election and shook confidence in Britain's counterterrorism strategy (http://www.marketwatch.com/story/enough-is-enough-says-may-as-islamic-state-claims-credit-for-london-attack-2017-06-04).
Last week, the FTSE 100--which has been scoring record closes in recent sessions--was flat for the week (http://www.marketwatch.com/story/ftse-100-on-track-for-all-time-high-as-us-records-lift-trading-mood-2017-06-02).
Individual movers: Shares in British Airways parent International Consolidated Airlines Group SA (IAG.LN) closed off 2.4%, while easyJet PLC (EZJ.LN) lost nearly 3%, on the day. Following terror attacks, airlines often have seen brief declines in reservations by passengers.
Over in the midcap FTSE 250, Ocado Group PLC (OCDO.LN) ended down 1.2%, as earlier gains faded. The stock had been sharply higher after the online grocer announced a deal with a regional European retailer who will use Ocado's software platform.
The overall FTSE 250 was wrapped up 0.7% lower at 19,868.67.
(END) Dow Jones Newswires
June 05, 2017 11:54 ET (15:54 GMT)