FTSE 100 watch: Footsie under pressure in wake of election

on Jun 12, 2017

The UK benchmark index has slipped into the red in today’s session, with investors continuing to digest the outcome of last Thursday’s general election, and amid caution ahead of the two-day Federal Reserve meeting starting tomorrow. A selloff in tech shares on the other side of the Atlantic meanwhile has spread to Europe, pressuring shares in Micro Focus (LON:MCRO) and The Sage Group (LON:SGE).

As of 12:26 BST, the FTSE 100 had lost 6.31 points to stand 0.08 percent lower at 7,521.02, after Prime Minister Theresa May moved to strike a deal with Northern Ireland’s Democratic Unionists as her Conservative Party lost its parliamentary majority in last week’s election. The blue-chip index, however, rallied on Friday, with the election results weighing on the pound.
“We believe that a potentially weaker pound, if elevated political uncertainty were to remain, could help the relative performance of UK exporters vs domestic plays,” equity strategist Mislav Matejka commented today, as quoted by The Telegraph.

In individual movers, Micro Focus has tumbled to the bottom of the blue-chip leaderboard, following a selloff of tech shares in the US.
“Overvaluations of technology companies today resemble previous investment manias,” Fergus Shaw, fund manager at Cerno Capital, told Reuters. “During this initial tech boom, Sage shares also hit a high at eight pounds, yet despite the increased profits and dividends since, the share price is now 6.70 pounds.” Micro Focus’ share price is currently 2.95 percent worse off at 2,425.31p, while shares in The Sage Group are currently changing hands 2.65 percent lower at 679.00p.
**The FTSE 100 index was 0.11 percent lower at 7,519.22 points as of 12:42 BST on Monday, 12 June 2017.**