British utilities stocks fall sharply as election looms

(Reuters) - UK utilities led fallers in early London trading on Thursday after Prime Minister Rishi Sunak called a surprise election in July the previous day, raising concerns over political risk in the sector.

Also adding pressure was National Grid announcing plans to raise about 7 billion pounds ($8.9 billion) through a rights issue. The news sent its shares tumbling almost 9%.

An index of UK utilities shares was down almost 6%, on course for its biggest one-day drop since March 2020, weighed down by Drax, Pennon Group, United Utilities, all down more than 5%.

"Overall, we see most risk at the water companies, where we expect most rhetoric and a key political battle ground ahead of next election," wrote Citi analysts.

The broader FTSE All share index was down 0.1%.

($1 = 0.7859 pounds)

(Reporting by Danilo Masoni; Editing by Amanda Cooper)