FTSE 100 Slides Amid Election Woes and Business Slowdown

London's FTSE 100 saw a decline for the third consecutive day, driven by upcoming general election preparations and slower business growth in May. Defensive stocks gained, while utilities suffered. The mid-cap FTSE 250 remained flat, with mixed performances among individual stocks contributing to sectoral highs and lows.

London's FTSE 100 continued its slide for a third day on Thursday, as Britain began preparations for a general election on July 4 and data showed growth across businesses noticeably slowed in May.

The blue-chip FTSE 100 index slid 0.3% while the pound strengthened against the dollar at $1.2738. The mid-cap FTSE 250 was flat. An upbeat quarterly earnings report by Nvidia was offset by the surprise call for a general election by Prime Minister Rishi Sunak that spooked investors, prompting a strategic shuffle as they weighed the ramifications of the potential scenarios.

This pushed the utilities shares to the bottom of the sectoral charts, while defensive stocks such as Unilever , BAE Systems and GSK gained. "There's an element of caution and there tends to be a knee-jerk reaction and if you were concerned as an investor about the prospect of a Labour government, you may come out of some positions and start to de-risk," said Christopher Peters, trading floor manager at Accendo Markets.

Among stocks, National Grid was the top loser on the benchmark index with a 8.6% drop, after it said it would raise about 7 billion pounds ($8.90 billion) via a rights issue. Wizz Air jumped 4.2% after the European low-cost airline forecast a higher annual profit.

Qinetiq soared 13.4% after the defence group said it will raise its forecast for FY25. Hargreaves Lansdown surged 8.2% after the investment platform rejected a 4.67 billion pound ($5.94 billion) takeover proposal.

AJ Bell gained 10.5% after the investment platform reported its half-year results. Gains of Hargreaves and AJ Bell raised the investment banking sector to a more than two-year high and a leader among FTSE 350 sectors.

Meanwhile, the Purchasing Managers' Index showed growth across British businesses has cooled and was softer than expected.