2. Set-up of Chris Beauchamp, senior market analyst at IG Group
3. SOUNDBITE (English) Chris Beauchamp, Senior Market Analyst at IG Group:
"We had actually quite a big rise in the pound on the back of the announcement - a bit of a surprise move, of course, by the prime minister. We had the market already falling, the stock market; the FTSE 100 was down and that's been pushed a lot lower on the back of that, mainly because the pound has had such a strong day so we have seen a bit of repricing of stocks and forecasts for earnings on the back of that. I think the move higher in the pound is a reflection of the expectation that the Conservatives will win (the election), will be the largest party following the election, they will form the next government and that gives you the stability, it gives you the sort of stability at the heart of government that the markets like to see and that's why I think people are relatively calm about this one because it's one that the polls are pointing to a fairly solid and predictable result."
5. SOUNDBITE (English) Chris Beauchamp, Senior Market Analyst at IG Group:
"It's often the case that you get a move higher in the currency and then a fall in the stock market because a lot of these UK companies have earnings overseas so the rising pound makes those revenues more expensive, it makes their products more expensive overseas and so decreases the chances of a strong earnings report. And that's why you see people selling the shares on expectations of a weaker performance. It's the reverse of what we had after the Brexit referendum where the pound dropped sharply and the FTSE 100 went up quite a lot because you had that expectation they would be more competitive overseas, selling more products and thus having bigger profits."
7. SOUNDBITE (English) Chris Beauchamp, Senior Market Analyst at IG Group:
"Yeah, there's a sense that a lot of the minutiae will take a back seat now, that we'll have a sort of focus on the UK as a whole and the outlook. Now, that will mean that the indexes like the FTSE 100, the FTSE 250, will be front and centre and, of course, the pound, the UK government bond market as well. A lot of depend on what we see in the manifestos that will need to be rushed out in the next couple of weeks presumably and the statements from the party leaders, and that will mean we'll be keenly watching any clues that emerge in the next few days."
9. SOUNDBITE (English) Chris Beauchamp, Senior Market Analyst at IG Group:
"Well again it's very difficult for the market to work out what happens next. At least, with the polls as they are at the moment, it looks a fairly predictable outcome. We learnt last year, of course, not to trust too much in polls. But I think we can fairly anticipate the outcome of this one. But, as you pointed out, we've got a long period ahead of us now of uncertainty, with fresh Brexit negotiations, even after the election, and of course the potential Scottish referendum, that mean it is a very uncertain period for markets and it will be difficult for them to work out really what the UK will look like in a few years' time."
The UK's benchmark FTSE 100 stock index fell 180 points, or 2.46 percent, on Tuesday after Prime Minister Theresa May announced she plans to hold a snap general election on 8 June.
The UK pound, meanwhile, surged against the euro and the US dollar.
Chris Beauchamp, Senior Market Analyst at IG Group, said the higher currency movement is often seen alongside a fall in equities as "a lot of UK companies have earnings overseas so the rising pound makes those revenues more expensive".
He said it was the reverse of what happened following the UK's vote in June to leave the European Union, adding that it was difficult for markets to work out what happens next.
May is seeking a stronger mandate as she negotiates Britain's exit from the European Union.
She is hoping to strengthen her position in the House of Commons, where her Conservative Party has 330 seats out of 650.
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