ITV, Sky Stocks and Pound Drop as Election Leaves No Party With Majority

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London's Houses of Parliament

The FTSE 250 drops 0.5 percent, but the FTSE 100 rises early in the trading day.

The main U.K. stock market index rose slightly in early Friday trading, but some big entertainment and media industry stocks fell after the Thursday election led to a so-called "hung parliament," meaning that no party ended up with a majority. 

The Conservative Party's current prime minister Theresa May had called an early election to strengthen her position ahead of the Brexit negotiations with the European Union, but instead ended up weakened. Some observers suggested the Brexit talks could now take longer or lead to a softer version of Brexit than in the case of a clear May election win. Hung parliaments tend to be unstable, so observers immediately suggested there could be another early election in the future.

The Conservatives and the opposition Labour Party are now expected to try to find coalition partners or put together a government that would govern with a parliamentary minority.

The broad-based FTSE 250 stock was down 0.5 percent in early Friday trading, but the FTSE 100 stock index was up 1 percent in early Friday trading. Analysts said investors on Friday morning seemed to sift through the possible fallout of the election.

Among entertainment industry stocks, ITV shares fell 3.4 percent, while Sky's stock was down 2.5 percent. The stock of producer and distributor Entertainment One was down 1.2 percent. One analyst said that the election could produce economic jitters that could affect the advertising, subscription and other businesses that media and entertainment companies operate.

In the case of Sky, investors also seemed to gauge what fallout the election outcome may have on the U.K. regulatory review of 21st Century Fox's deal to take full control of the pay TV giant, which was unclear early in the morning.

The British pound was down 2.1 percent early on Friday, with some observers saying that boosted some FTSE 100 stocks with global businesses.

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