FTSE 100: 7364.56 ▼ -60.84 (-0.82%)
The FTSE 250 has jumped, wiping out the bulk of yesterday's losses and diverging from the blue-chip FTSE 100, which lost further ground after steeper falls.
The 'mid cap' index rose 169 points, or 0.9%, to 19,467, trading close to an all-time high of 19,523 hit yesterday before the announcement of a snap general election sent markets lower. That means the FTSE 250 has recovered the bulk of yesterday's 1.2% fall.
It's a different story for the FTSE 100, down nine points this morning after yesterday's heavier 2.2% slump. The more internationally-focused blue-chip index has been hurt by the surge in the pound, trading at $1.282, up 2.4% since prime minister Theresa May launched her bid for a June general election.
'The FTSE 250 is outperforming the FTSE 100, even though it did come under pressure on Tuesday as the pound surged,' said Kathleen Brooks, research director at City Index.
'We think that this index could be better protected from the downside forces weighing on the larger indices, as it is more correlated to the performance of the UK economy.'
Brooks added that while the FTSE 100, whose members rely on overseas markets for around three-quarters of their earnings, had been hurt by the pound's rally, other factors were also at play.
'The FTSE 100 is sensitive to the drop in iron ore prices, which have hurt commodity companies, who make up a significant portion of the FTSE 100,' she said. 'Also global stock indices have had a poor run of late, so overall market forces could be weighing on the UK index.'
Burberry (BRBY) was the biggest FTSE 100 faller, down 5.4% at £16.10 as the luxury goods retailer reported a slowdown in fourth quarter sales growth, hurt by tough conditions in the US.
Domestic retail stocks jumped to the top of the index, buoyed by the stronger pound. Sainsbury's (SBRY) was up 3.3% at 263p, Primark owner Associated British Foods (ABF) rose 2.4% to £27.82 and Marks and Spencer (MKS) added 2.3% to 361.8p.
It was a similar story on the FTSE 250, where consumer-focused stocks led the way. But Cobham (COB) slumped to the bottom of the index, down 8.7% at 126.5p on the engineering group's £512.4 million rights issue.
It was joined at the bottom of the index by emerging markets-focused investment trusts. Templeton Emerging Markets (TEM) fell 2% to 640p, JP Morgan Indian (JII) dropped 1.6% to 689.5p and JPMorgan Emerging Markets (JMG) was down 1.1% at 742p.
Emerging markets trusts were also among the 'small cap' fallers. Henderson Far East Income (HFEL) was down 2.3% at 352.6p, Schroder Asian Total Return (ATR) fell 2.2% to 275.5p and Pacific Assets (PAC) dropped 2.1% to 243p.