Global stock markets were mixed on Wednesday as investors gauged the impact from British Prime Minister Theresa May’s surprise decision to hold early elections.
KEEPING SCORE: British stocks opened lower following a heavy loss in the previous session, while other European shares bounced back. The FTSE 100 fell 0.1 percent to 7,142.30 while France’s CAC 40 rose 0.2 percent to 4,999.18 and Germany’s DAX gained 0.2 percent to 12,025.24. Wall Street looked set for gains, with Dow futures up 0.1 percent and S&P futures gaining 0.3 percent.
UK ELECTIONS: May called for an early general election in June, reversing her earlier stance, in hopes of securing a stronger parliamentary mandate for Britain’s formal exit from the European Union. The pound climbed on expectations May might secure a better deal for Britain from the EU thanks to moving the vote up from the next scheduled election in 2020. The announcement sent the pound higher but hammered the FTSE 100 index. The pound was trading at $1.2825, down from $1.2840 but still higher than the pre-announcement level.
ANALYST’S TAKE: “The surprise U.K. election has added to market nerves and volatility as traders assess the potential for increased geopolitical risk on several fronts,” Ric Spooner, chief market analyst at CMC Markets, said in a commentary. “The outcome of the U.K. election now adds an element of short term uncertainty about how the Brexit negotiations will unfold.”
ASIA’S DAY: Tokyo’s Nikkei 225 edged up 0.1 percent to 18,432.20 as the yen weakened slightly. South Korea’s Kospi shed 0.5 percent to 2,138.40. Hong Kong’s Hang Seng index fell 0.4 percent to 23,825.88 while the Shanghai Composite Index lost 0.8 percent to 3,170.69. Australia’s S&P/ASX 200 was down 0.6 percent at 5,804.00. Stocks in Taiwan, Singapore and the Philippines also fell.
OIL: U.S. crude oil futures added 13 cents to $52.54 per barrel in electronic trading on the New York Mercantile Exchange. The contract lost 24 cents to close at $52.41 a barrel on Tuesday. Brent crude, used to price international oils, rose 13 cents to $55.02 per barrel in London.
CURRENCIES: The dollar rose to 108.93 yen from 108.42 yen. The euro fell to $1.0714 from $1.0731.