LONDON (Reuters) - A stunning election upset for Prime Minister Theresa May sent Britain’s major share index shooting up on Friday, feeding off a weaker currency, while housebuilders and mid-caps suffered losses as uncertainty swirled around the UK’s leadership ahead of crucial Brexit negotiations.
The FTSE 100 .FTSE gained 1.1 percent by 0720 GMT after Britons dealt the governing Conservative party a punishing blow, denying May the increased mandate she had gambled on, with no clear winner emerging from Thursday's parliamentary election.
Sterling fell as much as 2.4 percent, providing a boost to the internationally-focused, exporter-heavy blue chip index, but there were heavy losses among some sectors.
Gold miner Fresnillo (FRES.L) gained as investors rushed to the safe haven asset.
Centrica jumped 3.2 percent on relief that an energy price cap proposed in the Conservative manifesto would not materialise as expected.
Mid-caps which derive a larger part of earnings from the UK and depend more on the domestic economy fell, however, as investors expressed concern around the country’s economic stability.
Bovis Homes (BVS.L) also dropped 3.1 percent.
“The result is more positive for large caps than mid-caps,” said Pierre Bose, head of European equity strategy at Credit Suisse, adding the bank would not downgrade its view on UK equities but was watching how the situation would play out.
Reporting by Helen Reid