Pound Rises And FTSE 100 Index Falls Amid Conflicting Election Polls

Pound Rises And FTSE 100 Index Falls Amid Conflicting Election Polls

London's blue-chip index fell from record heights and the pound bounced back as conflicting General Election polls led to choppy trading on the financial markets.

The FTSE 100 Index had managed a mid-session record of 7,586.45, before giving up its gains at the close to finish 6.56 points down at 7,519.95.

The London market had been buoyed earlier in the session by sterling's weakness after a YouGov poll pointed to a smaller Conservative lead and a hung parliament, with the Tories forecast to lose 20 seats.

Blue-chip companies, which report in US dollars or euros, get a lift on the FTSE 100 Index when the pound suffers because their earnings benefit from a more favourable currency translation.

However, the pound rebounded by late afternoon in response to a separate poll from Panelbase - conducted more than a week ago - showing the Tory lead had increased to 15 points.

Sterling was up 0.8% against the US dollar at 1.29 and 0.3% ahead versus the euro at 1.148.

Neil Wilson, senior market analyst at ETX Capital, said the pound was on course for a tumultuous week.

He said: "It looks like the FX market has decided to shrug off that YouGov survey which indicated a hung parliament is the most likely outcome from the June 8 poll.

"Instead the pound was buoyed by a Panelbase poll that gives the Tories a very healthy 15-point lead over Labour.

"Following on from this, a Kantar poll added to the positive sentiment after it revealed the Conservative share of the vote had ticked up one percentage point in the last week, to 43%."

Across Europe, Germany's Dax rose by 0.1% and the Cac 40 in France dropped by 0.4%.

The price of oil sank to a three-week low, with rising output in Libya exacerbating concerns about the potency of Opec's production cuts and the likelihood of it reducing overall supply in the market.

Brent crude was down 3.4%, or 1.77 US dollars, to 50.47 US dollars a barrel.

In UK stocks, supermarket giant Tesco was suffering after a fresh tranche of industry data showed rivals Aldi and Lidl had grown at their fastest rate since 2015.

The two German discounters reached a joint record market share of 12% as inflation cost families an extra £27 on groceries over the past 12 weeks, Kantar Worldpanel figures show.

However, Tesco increased sales by 1.8% year on year over the period, while Sainsbury's rose by 1.7% and Morrisons by 1.9%.

Shares in Britain's biggest supermarket were down 1.7p to 183.7p, Sainsbury's climbed by 1.3p to 281p and Morrisons slipped by 1.4p to 246.2p.

Away from the top tier, London-focused housebuilder Telford Homes eased back despite delivering record annual profits.

Shares were down 9p to 421.5p as the group posted a 5.9% rise in pre-tax profits to £34.1 million for the year to March 31 after sales jumped 19% to an all-time high of £291.9 million.

The biggest risers on the FTSE 100 Index were Randgold Resources up 200p to 7,365p, Mediclinic International up 19p to 808.5p, Barratt Developments up 11p to 612.5p, Merlin Entertainments up 9.5p to 529p.

The biggest fallers on the FTSE 100 Index were Rio Tinto down 80.5p to 3102.5p, BHP Billiton down 29.5p to 1173p, Glencore down 6.9p to 285.1p, Anglo American down 24.5p to 1031.5p.

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