FTSE jumps higher on weak pound and optimism over China

The FTSE 100 rebounded as traders were optimistic that China will use more funds to aid firms impacted by coronavirus while the index also benefited from weakness in the pound.

London’s top flight closed 75.01 points higher at 7,457.02 at the end of trading on Wednesday.

Connor Campbell, financial analyst at Spreadex, said: “The FTSE was well ahead of its peers as the session went on, climbing to a near one-week peak.

“Not only did the UK index benefit from a report claiming Beijing will help out airlines struck by the coronavirus, further adding to the idea that China is set to try and money its way of out of a crisis, but also the pound’s afternoon downturn.”

Sterling was volatile during the morning session, initially pushing higher after inflation jumped to a six-month high of 1.8%.

However, the currency slipped into the red on the back of anxieties over trade conversations between the UK and EU.

The value of the pound thus fell 0.5% versus the US dollar at 1.293 and slid 0.52% against the euro at 1.198.

The major European markets also moved higher on hopes of further stimulus in China, with the German index moving just a handful of points away from a record high.

The German Dax increased by 0.79% while the French Cac moved 0.9% higher.

Across the Atlantic, the Dow Jones opened marginally higher, with traders in the US slightly more cautious over the impact of coronavirus.

Heathrow stock
Heathrow stock

In company news, British Airways owner International Airlines Group (IAG) saw shares nudge higher after Qatar Airways announced it increased its stake in the FTSE 100 firm.

Qatar Airways said it increased its holding in IAG to 25.1% from 21.4% as it cheered its “highly successful” investment in the airlines group, which also owns carriers including Ireland’s Aer Lingus and Iberia in Spain.

The airline saw shares increase by 10p to 642p on Wednesday.

Shares in Laura Ashley rebounded slightly after the troubled retailer said it gained permission to use a loan to fund its daily operations.

The business said talks with lender Wells Fargo over the terms of a £20 million loan had concluded. Shares increased by 0.25p to 1.9p at the end of trading.

Metro Bank dipped lower after it appointed interim boss Dan Frumkin as its permanent chief executive as the group looks to recover after a tough year.

Shares in the company – which saw previous boss Craig Donaldson step down in December – slipped 2.7p lower to 192.3p.

Moneysupermarket also closed lower after it boss, Mark Lewis, told his directors that he wants a career change and announced his intention to leave the firm. Shares closed 7.1p lower at 309.8p.

The price of oil rose as hopes that China will deliver a boost for its economy helped to improve sentiment in the energy market.

The price of a barrel of Brent crude oil increased 2.43% to 59.1 US dollars.

The biggest risers on the FTSE 100 were Flutter, up 350p at 8,968p, Evraz, up 13.2p at 390.4p, Melrose, up 8.1p at 244.9p, and Ocado, up 36.5p at 1,167p.

The biggest fallers on the index were NMC Health, down 61.2p at 783p, Rolls-Royce, down 12.8p at 662.2p, Auto Trader, down 6.6p at 570.4p, and Standard Chartered, down 4.4p at 626.2p.