Stocks Fluctuate on Theresa May’s Early Election Call

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On Wednesday, European stocks rose while Asian stocks fell following UK Prime Minister Theresa May’s declarationof having a general election on June 8, three years earlier than planned. May’s sudden decision for a snap election ahead of the Brexit negotiations added to the general sense of uncertainties.

The Stoxx Europe 600 increased 0.4 percent to 377.85 and futures on the S&P 500 rose 0.3 percent to 2,344, while the International Business Machines (IBM) fell 0.6 percent to 170.05 after hours of US trading after its 20th consecutive quarterly sales decline.

Prime Minister May said that Britain needed assurance, stability and strong leadership subsequent to the 2016 EU referendum vote to leave and that is why the snap election is necessary in order to secure authorization for the upcoming Brexit negotiations.

The Prime Minister’s unexpected announcement sent the pound climbing to more than 2 percent, although it slipped on Wednesday.

Euro Index edged up by 0.02 percent to 86.72 but the British Pound shrunk 0.04 percent to 1.2837 dollars and the Euro declined as well by 0.06 percent to 1.0727 dollars.

France is now preparing for the first round of its presidential elections at the weekend, while Germany is scheduled to vote this year. Both countries may have a major indication for the future eurozone.

Asian markets were lower on Wednesday due to negative lead from Wall Street and Europe. Investors are also favoring safe-haven assets ahead of French presidential elections and with analysts saying Britain’s surprising decision to conduct a general election added to global uncertainties.

According to Yutaka Miura, the market dislikes uncertainty. Investors had already been tense over the French presidential election and now the UK general election is adding more doubt in Europe.

Asian stocks apart from Japan hit their lowest since mid-March.

The Shanghai Composite (SSEC) index fell 0.7 percent to 3,171 on Wednesday 07:10 GMT. The Shenzhen market was 0.7 percent down to 1,932 for the fourth day.The Hang Seng (HSI) index sank 0.4 percent to 23,825 and so with the Hang Seng China Enterprise (CEI) (HSCE) getting a 0.6 percent decline to 9,983.

Japan’s Topix (TOPX) was also down 0.01 percent to 1,471 whileits Nikkei 225 (N225) rose 0.07 percent to 18, 432.

Sapporo Holdings Ltd. was among the best performers on the Nikkei 225 session with a 6.2 percent increase to 3,165. Other top performers include Kyowa Hakko Kirin Co., Ltd. with a 5.8 percent high to 1,825 and Toshiba Corp. climbing 5 percent to 209.2.

Huge losses were encountered by Yamato Holdings Co., Ltd. by 3.4 percent to 2,270, Nippon Yusen K.K shrinking 3.1 percent to 218.5 and West Japan Railway Co. dropping 3 percent to 7,265.

Australia’s S&P/ASX 200 (AXJO) alsoshrunk 0.5 percent to 5,804 and South Korea’s Kospi(KS11) index edged down 0.4 percent to 2,138.

FTSE Malaysia KLCI (KLSE) declined 0.09 percent to 1,738.

Singapore shares were also looking down as its FTSE Straits Times (STI) index fell 0.3 percent to 3,126 while its MSCI sank 0.2 percent to 344.25. Keppel Corp. Limited (KPLM) and Sembcorp Industries Ltd (SCIL) both suffered a loss of 2.6 percent to 6.64 and 1.9 percent to 3.060 respectively. Both companies were among the biggest losers on the benchmark stock index.

Philippines’ PSEi Composite (PSI) too lost 0.8 percent to 7,522.

Among the best performers was Lt Group Inc. (LTG) with a 2.4 percent high to 15.780, First Gen Corp (FGEN) gaining 0.9 percent to 21.80 and Metro Pacific Investment Corp. (MPI) with a high of 0.7 percent to 6.540.

Major losses were from Telecommunications Company PLDT Inc. which lost as much as 3.4 percent to 1,700, JG Summit Holdings Inc. (JGS) with a 3 percent cut to 79.400 and Globe Telecom Inc. (GLO) which was down 2.4 percent to 1,990 on Wednesday.

On the other hand, gold futures declined 0.7 percent to 1,285. Price for silver also dropped 0.1 percent to 18.25 while copper futures grew 0.4 percent 2.541.

Oil prices were up on Wednesday with crude gaining a 0.06 percent to 52.44 while Brent oil futures a 0.09 percent high to 54.94.

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