Friday Morning Briefing: Pound Falls On U.K. Polls; Asian Stocks Climb    

The British pound fell to its lowest since April 2016, after exit polls suggested that U.K. Prime Minister Theresa May's plan to call for a snap general election may have backfired.

The exit polls after Thursday's elections show May winning 314 seats compared to an earlier 330 seats and the necessary 326 seats for a majority.

The yen strengthened 0.1 percent to 109.89 per dollar while Asian equities displayed gains. The Nikkei index gained 0.8 percent and the Hang Seng Index was mostly unchanged. The Japanese Topix also rose 0.3 percent.

The Bloomberg Dollar Spot Index gained 0.2 percent while the euro climbed 0.1 percent. The WTI crude fell after an unexpected increase in U.S. stockpile, questioning the effect of OPEC's oil cuts.

Meanwhile, rubber held on to its longest run of losses in at least 42 years, dropping to a seven-month low on concern that a shaky Chinese economy may slow demand just as supply picks up.

June Could Be May's End?

The Sterling pound traded 1.6 percent lower at 1.27 against the dollar, as investors faced prospects of another round of political turmoil less than a year after Britain voted to leave the European Union. “The initial exit poll suggests it's been a catastrophic campaign for Theresa May,” said Craig Erlam, London-based senior market analyst at OANDA Corp to Bloomberg.

While may could still win a majority, attention will turn to her future. She will now need to decide whether to resign or try to form a new government. Another election is also a possibility.

The U.K. gilt yields underperformed its European peers despite climbing three basis points. Gold futures for an ounce fell 1.1 percent to $1,279.5.

Also Read: U.K. Heads For Hung Parliament As May Election Gamble Fails

Crude Woes

Crude oil is headed for its third week of losses on speculations of rising supply in the U.S. and Nigeria. The West Texas Intermediate (WTI) crude dropped 0.2 percent to $45.56 per barrel.

The latest U.S. data showed an increase in stockpiles instead of an expected decline. Nigeria's Royal Dutch Shell Plc also lifted restrictions on its exports leading to greater global supply. The Energy Information Administration predicted that U.S.'s crude output will surge to a record level of above 10 million barrels a day, by next year.

Also Read: Nigeria's Forcados Oil Comes Back In Fresh Blow To OPEC Cuts

Investors Shrug Off ECB, Comey Testimoney

Former FBI Director James Comey and U.S. President Donald Trump indulged in cross accusations of lying as the Senate testimony unfolded.

The European Central Bank also slashed its inflation forecast despite improved aspects of the economy. Both the events had little effect over the markets.

Also Read: What We Learned, And Didn't, From Comey Testimony

Good Start?

The Singapore traded SGX Nifty, an early indicator NSE's Nifty 50 performance in India, was unchanged at 9,678.

Sunteck Realty Ltd., a luxury real estate developer, will be in focus after the company announced a 1:1 stock split. Tyre maker Ceat may also get some investor attention after brokerage house Macquarie initiated coverage on the stock with an ‘Outperform' rating.

Also Read: Glut On First Day After Maharashtra Farmers' Strike Doesn't Help Traders