Pound reaches two-week high
U.K. stocks finished Thursday's choppy session lower, as investors awaited the results from a closely watched parliamentary election, with a Conservative Party majority at stake.
The FTSE 100 fell 0.4% to end at 7,449.98, giving up earlier gains and marking a fourth straight decline. Basic material, utility, financial shares logged gains, but consumer-related and oil and gas stocks were left in the red.
But the more domestically focused and midcap FTSE 250 index flipped higher to close up 0.2% at 19,743.41.
Read:U.K. election--these are the stocks and sectors to watch once the result is in (http://www.marketwatch.com/story/watch-for-a-shake-up-among-uk-stocks-after-thursdays-election-2017-06-06)
U.K. stocks still tried to find firm footing after the European Central Bank left interest rates unchanged, as expected, but removed language from its policy statement indicating rates could go lower in the future. (http://www.marketwatch.com/story/ecb-leaves-policy-unchanged-drops-reference-to-lower-rates-2017-06-08)
(http://www.marketwatch.com/story/ecb-leaves-policy-unchanged-drops-reference-to-lower-rates-2017-06-08)U.K. investors watch ECB policy decisions in part as the European Union is a top trading partner for Britain.
European Central Bank President Mario Draghi said risks to the region's economic outlook are now "broadly balanced" but underlying inflation remains subdued. Substantial "monetary accommodation" is still needed, he said, stressing that the ECB is ready to increase its asset-buying program if needed in the future.
See the recap of MarketWatch's live blog of Draghi's press conference (http://blogs.marketwatch.com/thetell/2017/06/08/mario-draghi-live-blog-ecb-drops-reference-to-potential-for-further-rate-cut/)
Election Day: Polls will close at 10 p.m. local time, or 5 p.m. Eastern Time, in a general election called out of cycle (http://www.marketwatch.com/story/whats-a-snap-election-and-why-does-uk-prime-minister-theresa-may-want-one-2017-04-18) by U.K. Prime Minister Theresa May in a bid to gain more seats for her Conservative Party and strengthen her hand in Brexit negotiations (http://www.marketwatch.com/story/uk-adds-another-layer-of-complexity-analysts-react-to-surprise-snap-election-call-2017-04-18).
"The final round of opinion polls has provided little clarity about the outcome of the election, with the Conservative lead ranging from double-digits to "virtually nonexistent," said Ian Williams, economist and strategist at Peel Hunt.
"The level of turnout, especially among younger voters in marginal constituencies, may well prove decisive," Williams said in a note.
With 650 seats at stake, a majority is at least 326 seats. The Conservatives currently have 330 seats and, with support, a working parliamentary majority of 17.
"The spread quotes have settled down in recent days, at levels implying a majority of around 80 seats, which feels consistent with where sterling is now trading," Williams said. "Such a result should prompt an initial, probably modest, relative rebound in the more UK-exposed mid & small cap groups."
The pound was buying $1.2936, and earlier traded at a two-week high around $1.2978. Sterling late Wednesday bought $1.2912. A stronger pound can eat into sales of multinational companies listed on the FTSE 100.
Analysts at ING have said a majority of at least 50 seats for the Conservatives would be needed for sterling to take any meaningful steps higher. (http://www.marketwatch.com/story/this-is-the-worst-that-could-happen-to-the-pound-in-the-uk-election-and-its-not-jeremy-corbyn-2017-06-07)
(http://www.marketwatch.com/story/this-is-the-worst-that-could-happen-to-the-pound-in-the-uk-election-and-its-not-jeremy-corbyn-2017-06-07)Read:When do we know who won the U.K. election? (http://www.marketwatch.com/story/when-is-the-uk-election-and-when-do-we-know-who-won-2017-06-01)
Mining cheer: Shares of miners ended mostly higher after the release of data showing Chinese exports in May rose a more-than-expected 8.7% (http://www.marketwatch.com/story/chinas-exports-rise-for-third-straight-month-2017-06-08) from a year earlier, suggesting resilient global demand for goods from the world's second-largest economy. China is a major buyer of industrial and precious metals.
In the group, iron ore producer Rio Tinto PLC (RIO) (RIO) added 1.8% and BHP Billiton PLC (BLT.LN) (BHP.AU) tacked on 1.1%. Glencore PLC (GLEN.LN) climbed 2.1%, but Randgold Resources Ltd. (RRS.LN) fell 1.9% as gold prices declined more than 1% (http://www.marketwatch.com/story/gold-drops-in-back-to-back-sessions-as-ecbs-position-change-lifts-dollar-2017-06-08).
Read:BHP Billiton's board is in hedge fund's crosshairs (http://www.marketwatch.com/story/bhp-billitons-board-is-in-hedge-funds-crosshairs-2017-06-07)
Other movers: Elsewhere on the FTSE 100, shares of Kingfisher PLC (KGF.LN) fell 1.1%, after Investec recommended selling shares in the DIY retailer.
A few FTSE 100 constituents traded without dividend rights Thursday. Advertising firm WPP PLC (WPP.LN) turned lower to end down 0.5% but Associated British Foods PLC (ABF.LN) closed up 0.4%. Vodafone Group PLC (VOD.LN) (VOD.LN) turned down 1%. Chemicals company Johnson Matthey PLC (JMAT.LN) reversed course and closed up 0.8%.
(END) Dow Jones Newswires
June 08, 2017 12:08 ET (16:08 GMT)