The exit poll proved pretty accurate, in the end. At the time of writing, the Conservative Party has won 318 seats in this week's snap election, with just Kensington yet to declare its result. Falling short of the 326 seats needed to secure a majority, this left voters with a hung parliament. The Conservative leader Theresa May will seek to form a minority government assisted by Northern Ireland’s Democratic Unionist Party. Mrs May has committed to staying on as leader of the Conservatives, despite calls from Labour and Tory party members to step aside.
The Democratic Unionist Party has said it will form a government with the Conservatives without the need for a formal coalition. Instead it would seek a 'confidence and supply' arrangement, where the DUP would support it on crucial votes. As we go to pixel, Mrs May is heading to Buckingham Palace to ask the Queen's permission.
The Labour Party had picked up an additional 31 seats to win 261 in total, at the time of writing. This was a much better performance than expected by the average campaign poll. With the Brexit negotiations due to start in just 10 days, this has left the UK’s political backdrop even more uncertain.
The pound fell more than 2 per cent against the US dollar in early morning trading, before climbing back above $1.27 by midday. There was a divergence in reactions from the UK equity markets. The FTSE 100 was up modestly, while the more domestically-focused FTSE 250 fell. However, the UK currency and stock market reactions have been far more muted than those that followed last year’s referendum result.
The UK poll undoubtedly complicates the already-difficult Brexit negotiations with the European Union, due to commence on 19 June. It could result in the commencement of the talks being delayed, causing further uncertainty for UK corporates. The European Commission’s chief Brexit negotiator Michel Barnier said via Twitter: “Brexit negotiations should start when UK is ready; timetable and EU positions are clear. Let's put our minds together on striking a deal.”
Commentators are divided on the impact that the result would have. Some suggested a weaker leadership for Mrs May would empower the Tory right, while others interpreted the party's losses as a rejection of its hard-line, immigration-focused approach.
How the market responded
The risers and fallers exhibited a similar pattern to the session following last year's EU referendum result. Housebuilders, banks and other stocks that are heavily exposed to the domestic economy - to business and consumer sentiment - sold off, but not to the same degree as was seen then. At the time, many private investors took advantage of the dips to buy into income stocks at more attractive valuations.
At time of writing, shortly before midday on Friday, here were the biggest fallers among the market's largest 250 companies:
| % change on day | % change, past year | |
| Crest Nicholson Holdings | -3.9% | 0.5% |
| Travis Perkins | -3.8% | -16.6% |
| Howden Joinery Group | -3.6% | -11.3% |
| Metro Bank | -3.5% | 65.0% |
| The Berkeley Group | -3.5% | -4.0% |
| Capita | -3.0% | -50.1% |
| Grafton Group | -3.0% | 7.2% |
| Barratt Developments | -2.7% | 1.1% |
| The Royal Bank of Scotland Group | -2.7% | 12.7% |
| Hays | -2.7% | 21.4% |
| Source: Capital IQ |
And here were the risers, including the dollar earners. Again, sterling's devaluation was much more modest, and this has been reflected:
| % change on day | % change, past year | |
| KAZ Minerals | 4.9% | 236.6% |
| Fresnillo | 4.7% | 43.9% |
| Hochschild Mining | 4.6% | 93.0% |
| Centamin | 3.1% | 54.8% |
| Ashmore Group | 2.9% | 23.2% |
| South32 | 2.9% | 95.1% |
| Weir Group | 2.7% | 50.2% |
| Randgold Resources | 2.7% | 16.2% |
| Smurfit Kappa Group | 2.4% | 21.7% |
| ASOS | 2.3% | 74.5% |
| Source: Capital IQ |
