Pound remains below $1.28
U.K. stocks declined Monday, hampered by a drop in tech shares and ongoing questions about the political landscape in Britain after the Conservative Party lost its parliamentary majority.
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The FTSE 100 fell 0.3% to 7,502.56, on track for its fifth loss in six sessions.
Near the bottom of the FTSE 100 were shares of Micro Focus International PLC (MCRO.LN) as they dropped 2.6%, and shares of Sage Group PLC (SGE.LN) gave up 1.8%.
The shares were suffering as part of a selloff in the technology sector that abruptly kicked off Friday on Wall Street and spilled over Monday into the Asian and European trading sessions. The technology bellwether Nasdaq Composite Index tanked 1.8% on Friday, and the S&P 500 technology index plunged 2.7%.
See:Pay attention to the ominous pattern in big technology stocks (http://www.marketwatch.com/story/pay-attention-to-the-ominous-pattern-in-big-technology-stocks-2017-06-09)
The FTSE 100 on Friday shot up 1%, aided by a slide in the pound after U.K. Prime Minister Theresa May failed in her bid to expand her party's grip on power in the House of Commons.
May was set to meet Monday with rank-and-file lawmakers as she faces criticism for her decision to hold a general election that resulted in a hung parliament, and just before the slated June 19 start of negotiations over Britain's exit from the European Union.
Read:Questions grow over Theresa May's future as U.K prime minister (http://www.marketwatch.com/story/questions-grow-over-theresa-mays-future-as-uk-prime-minister-2017-06-12)
May has been working on forming a new government with support from Northern Ireland's Democratic Unionist Party, which holds 10 seats, but no agreement has been struck yet, according to reports Monday.
"The government is fragile," Kathleen Brooks, research director at City Index, said in a note. "Theresa May still hasn't secured a formal 'agreement' with the DUP, she has to meet the incredibly popular Emmanuel Macron later ... and she still has to pass a Queen's Speech in Parliament next week that is necessary to give her the right to rule."
May and French President Macron were scheduled to meet in Paris on Tuesday. Macron's upstart party on Sunday won the first round of France's parliamentary elections (http://www.marketwatch.com/story/macrons-party-on-pace-for-landslide-win-in-french-elections-2017-06-11).
The pound was buying $1.2726, down from $1.2741 late Friday in New York. Sterling on Friday sank to seven-week lows as it lost the $1.29 handle in the wake of the election result.
A weaker value of sterling can help revenue and earnings made overseas by multinational companies on the FTSE 100, but the pound's decline didn't boost the index Monday. But among the roughly 25 shares that rose Monday, oil producer Royal Dutch Shell PLC (RDSB.LN)(RDSB.LN) climbed 1.2% and chemicals supplier Johnson Matthey PLC (JMAT.LN) picked up 1.1%.
Vodafone PLC (VOD.LN) rose 1.1%, with the mobile-services company upgraded at Deutsche Bank to a buy rating, according to Dow Jones Newswires. Telecom operator BT Group PLC (BT.A.LN) was up 1.1%.
Read:U.K. election--So what is a hung parliament? (http://www.marketwatch.com/story/uk-election-so-what-is-a-hung-parliament-2017-06-08)
Also:May looks to smaller Northern Irish party for support after election rebuke (https://www.wsj.com/articles/u-k-s-theresa-may-looks-to-smaller-party-to-form-government-1497003906)
(END) Dow Jones Newswires
June 12, 2017 04:57 ET (08:57 GMT)