LONDON — European futures are flat on Friday morning as Britain heads towards a hung parliament and an uncertain future.
Futures on both of Europe’s biggest stock bourses, Britain’s FTSE 100 and Germany’s DAX 30, are almost entirely flat at 6.50 a.m. BST (1.49 a.m. ET), with over an hour to go until trading formally begins in Europe.
Here are the charts of how FTSE futures look right now:
And here’s how the DAX futures look:
Tom Stevenson, director at Fidelity International, said in a morning note: “The market reaction to this unwelcome outcome is likely to hit UK shares, bonds and the pound. Markets will likely remain on the back foot while the difficult job of putting together a workable government is undertaken. This is when a well-diversified portfolio comes into play. The case for a well-balanced portfolio, geographically and by asset class, has never been stronger.”
“A weak pound has provided a boost to the UK equity market over the past year but that was against a backdrop of a more robust economy than anyone expected after the Brexit vote. Looking ahead, the FTSE 100 will struggle to progress even with the tailwind of weak sterling’s boost to exporters and overseas earners. Domestically-focused companies in the FTSE 250 and Small Cap indices also face headwinds as sluggish domestic earnings and rising inflation deliver an effective pay-cut to British workers. We continue to prefer European equities to the UK market.”