Stock Markets And Politics

Discussion in 'Politics Discussion' started by longtermbull, Jun 27, 2017.

  1. longtermbull

    longtermbull Administrator Staff Member

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    Today the Conservative party is in disarray after losing its majority in the House of Commons in the UK. The Prime Minister Theresa May took a massive gamble calling a snap election in her quest to increase the Conservative party majority. Despite the fact that the Tory party was 24 percentage points ahead of their nearest rival, the Labour Party, there was a major turnaround in the final few days and the results were nowhere near those forecast in the early days!

    So, how did the UK stock market react?

    Testing all-time highs

    The UK stock market was up over 1% after the pound plummeted against major currencies such as the dollar. It is bizarre but because the UK currency has collapsed on the currency markets this will increase the profitability of UK companies with overseas exposure when converting back into sterling. It also makes the UK a magnet for overseas investors, such as property investors, although imports will be more expensive because of the weaker pound.

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