London close: Late rally not enough as UK stocks fall on election day

Stocks rallied off five-week lows on Thursday afternoon but still finished firmly in the red, as election-day jitters in the UK and volatility in the European bond markets weighed on sentiment.The FTSE 100 ended the session down 0.67% at 6,886.95 having dropped as much as 1.8% in the morning session to an intraday low of 6,810.05 - its lowest intraday level since 2 April when it touched 6,801.27."European stock markets were left a little out of breath on Thursday as government bond markets pulled a full 180 degree turn from savage losses to a sizeable move higher," said analyst Jasper Lawler from CMC Markets. German bunds in particular rose as much as 20 basis points during the session, but pared gains as falling crude prices "tempered the inflation fears that have caused a massive jump in bond yields this week", Lawler said. Brent oil futures were down 1.9% at $66.47 barrel by the end of the day.The mood on the market was also dampened by comments from German finance minister Wolfgang Schaeuble who said that hopes for a breakthrough on Greece at the Eurogroup meeting on Monday are not high. "One shouldn't assume any kind of spectacular results," he said.Election uncertainty takes holdWith less than five hours to go before voting ends and exit poll results are released, investors were showing caution amid uncertainty over which party/parties will come out in the UK general election."It's the closest-fought race in many years and as such it will take a while to understand how the government will be formed and the ramifications of the probable coalition will not be immediately known," said Brenda Kelly, head analyst at London Capital Group.Societe Generale on Thursday recommended investors to steer clear of UK equities even beyond the election, despite their recent underperformance. The bank cited fading growth momentum, currency swings and high exposure to the oil and gas sector as three reasons why the market is unattractive.Morrisons sinks as sales decline, Telecity jumpsMorrisons was the standout mover of the day on Thursday as investors reacted to deteriorating sales trends at the grocer in its first quarter. Like-for-like sales dropped 2.9% in its first three months of the fiscal year, compared with a lesser 2.6% fall in the fourth quarter. Results were not as bad as many had feared, but that didn't stop the stock from dropping 6.5%.Despite posting some slightly disappointing first-quarter results, datacentres group Telecity was leading the risers on the FTSE 250 after receiving a £2.32bn takeover offer from Equinix at 1,145p per share in cash and equity, a 27% premium to the closing price on Wednesday.Mining stocks were also weaker as risk appetite waned on the back of political uncertainty in the UK. The decision by the world's largest steel producer, ArcelorMittal, to cut its profit forecasts for 2015 was also likely hitting shares in the sector. Anglo American, BHP Billiton and Fresnillo were all on the decline.Falling crude prices were also having a negative effect on shares of oil majors BP and Shell.Airlines Easyjet and IAG were in demand after reporting traffic growth for April in spite of air-traffic control strikes in France which led to hundreds of cancellations. Easyjet in particular cancelled 602 flights last month, compared with just 48 in April 2014.Insurance group RSA impressed investors with a positive start to the year as underlying premium income returned to modest growth, though reported results were dented by the strength of the pound.BT erased an earlier gain despite the telecoms giant's annual profits beating City forecasts for earnings and cash flow as it added a record number of new broadband customers in the fourth quarter. Market MoverstechMARK 3,196.00 +0.06%FTSE 100 6,886.95 -0.67%FTSE 250 17,447.96 +0.21%FTSE 100 - RisersCarnival (CCL) 3,011.00p +3.72%SABMiller (SAB) 3,531.00p +3.65%Aberdeen Asset Management (ADN) 445.30p +3.29%International Consolidated Airlines Group SA (CDI) (IAG) 562.00p +3.12%easyJet (EZJ) 1,821.00p +2.71%Aviva (AV.) 527.00p +2.63%Taylor Wimpey (TW.) 166.00p +2.41%RSA Insurance Group (RSA) 427.30p +2.22%Pearson (PSON) 1,309.00p +1.55%Dixons Carphone (DC.) 437.20p +1.42%FTSE 100 - FallersMorrison (Wm) Supermarkets (MRW) 176.90p -6.55%GlaxoSmithKline (GSK) 1,447.00p -4.46%Anglo American (AAL) 1,107.00p -4.03%BHP Billiton (BLT) 1,538.00p -3.54%Admiral Group (ADM) 1,496.00p -3.48%BP (BP.) 457.10p -3.42%Fresnillo (FRES) 704.00p -3.36%Randgold Resources Ltd. (RRS) 4,775.00p -2.83%Smiths Group (SMIN) 1,123.00p -2.69%Weir Group (WEIR) 1,861.00p -2.57%FTSE 250 - RisersTelecity Group (TCY) 1,095.00p +21.73%PayPoint (PAY) 858.00p +7.32%Diploma (DPLM) 802.00p +5.74%Genus (GNS) 1,345.00p +5.57%Just Eat (JE.) 496.10p +3.96%Man Group (EMG) 179.00p +3.53%Moneysupermarket.com Group (MONY) 293.50p +3.42%Wetherspoon (J.D.) (JDW) 788.50p +3.14%FirstGroup (FGP) 103.10p +2.69%TalkTalk Telecom Group (TALK) 372.70p +2.62%FTSE 250 - FallersTullow Oil (TLW) 405.60p -5.61%Petrofac Ltd. (PFC) 838.00p -5.42%Lonmin (LMI) 143.50p -4.90%Allied Minds (ALM) 590.00p -4.84%Premier Oil (PMO) 176.00p -4.81%Kaz Minerals (KAZ) 247.50p -4.55%Soco International (SIA) 188.80p -4.50%IMI (IMI) 1,187.00p -4.27%Hunting (HTG) 586.50p -4.24%Vedanta Resources (VED) 637.00p -4.21%