A shock British election result that left no single party with a clear claim to power hit sterling and left the dollar on course for its best day in over a month, while world shares headed towards their first weekly fall since April. Sara Hemrajani reports, the outcome of the snap poll was a blow to investors who had already weathered major risk events in the United States and Europe the previous day.
A split reaction from the markets, much like the election result itself. As the UK enters a period of political uncertainty, British equities and sterling are moving in different directions. SOUNDBITE: Mike Ingram, Market Strategist, BGC Partners, saying (English): "We saw, effectively, a two percent move in sterling just after 10 o'clock last night on the back of those exit polls. The biggest move that we've seen in the currency since January. Sterling still languishing at those levels, currently trading a little bit below 1.27 against the dollar. In terms of equities, actually quite interesting, we've seen the FTSE 100, at least, open up approximately 80 points or just over one percent - really being driven, I think, in large part by that forex move." But there's a divergence in stocks as well. The major exporters listed on the FTSE are on the rise, betting that a weaker pound means their goods and services are more competitive overseas. While companies exposed to the domestic UK economy are feeling the strain of the vote's outcome. As for Europe, despite the potential disruption to Brexit talks, shares appear to be holding steady. SOUNDBITE: Robert Halver, Head of Capital Analysis, Baader Bank, saying (German): "The Dax seems to be rejoicing because the money that has previously gone to England on the British stock market, is now coming to Germany because Britain is very unsafe politically." Across the Channel, many investors are bracing for further headwinds - namely whether Theresa May can form a stable coalition government and negotiate an exit from the EU.