British Stocks Threatened Following May's Resignation
British Prime Minister, Theresa May had announced her resignation date due to the divorced deal of the Brexit Agreement Withdrawal. Shortly after her resignation announcement, both Euro and Pound Sterling were pressured. Stock market were also affected negatively. A survey from Global Regulatory outlook stated that May’s unexpected resignation made a significant impact to the FTSE 100 as it went up to 0,7 percent and the midcap index rose 0,4 percent. However, as the no-deal brexit might eventually occur as the EU rejects to do any negotiation, certain sectors which are prone to Brexit and political changes such as house-builders, UK domestic banks, retailers and airlines might be grounded if the no deal-Brexit is implemented, therefore affecting stocks associated with the sectors negatively. May is announced to step down on June 7th, or until the new prime minister is found. It is expected that the new prime minister is a pro-Brexit so there will be no domestic political changes in the future.
Furthermore, political tension between Europe Union (EU) and Italia are boiling, driving the Euro to depreciate, pushing a more aggressive EU policy making in the future. Euro weakened 0,1% which is the lowest in the last two years, and Pound 0,05% for the last four months. Whilst in England, as the hard Brexit is already envisioned, Boris Johnson, the vocal representative of English parliament, strongly against EU, at the moment is still considered superior as the successor of May. Morten Lund, the currency expert, said that the probability of Hard Brexit can be up to 15%-20%. Thus, the unstable political conditions leads to high uncertainty which leads to an uncertain future for Euro and Pound sterling both.