The FTSE 100 hit another new high on Wednesday, after a shocking election poll sent sterling to a six-week low.
The FTSE 100 index hit 7563 at midday, up 37 points today and breaking Friday’s record of 7554 points.
Markets have been volatile since the release of a new poll on Wednesday morning, suggesting the Conservatives are unlikely to win the election outright and that the UK may have another hung parliament.
The pound sunk to a six-week low against the dollar after its release, falling to $1.278, its lowest level since Theresa May called a general election on April 18th.
However, the bad news for the pound has been good news for FTSE 100 companies, particularly multinational ones that record revenue in foreign currency and report earnings in sterling. Reckitt Benckiser and Shire were both up 1.1 per cent by mid-morning, with British American Tobacco is also up over 1 per cent and Vodafone shares also trading higher.
However, other polls released on Wednesday mitigated concerns of a Conservative defeat. Geoffrey Yu of UBS Wealth Management suggests the pound may yet bounce back as poll results continue to pour in:
“The latest poll suggesting a hung parliament is likely has shaken markets.
“Were this to be the outcome of the General Election on 8 June, we can expect a repeat of this behaviour, with significant volatility in sterling. Yet today’s poll distracts from the many others showing that a Conservative majority remains the most likely outcome, as is our base case. With no further indications of a hung parliament, the recent fall in sterling may be seen as a buying opportunity for investors,” he told the Guardian.