Pound dips against dollar while FTSE 100 lags behind peers
The pound suffered another drop on Thursday as the dollar remained strong and Brexit uncertainty played on traders’ nerves.
Sterling fell 0.48% against the US dollar to 1.282, and was down 0.25% versus the euro at 1.127, despite easing of tension surrounding Theresa May’s leadership.
David Madden, market analyst at CMC Markets, said: “Prime Minister May is said to have had a positive meeting with the 1922 committee yesterday, but that has only slightly reassured traders.
“Mrs May remains in a tight spot and she probably only dodged a vote of no confidence because there is no obvious candidate to replace her. Uncertainty surrounding Brexit is likely to hang over the pound.”
The FTSE 100 managed to climb back above the 7,000-point mark but lagged behind its European counterparts.
The blue-chip index closed 41.12 points, or 0.59%, higher at 7,004.1.
Fiona Cincotta, senior market analyst at City Index, said: “After falling sharply on the open the FTSE spent the rest of the session grinding higher before dipping in and out of positive territory.
“On the whole, global stocks were on the rise in an attempted recovery from Wednesday’s bloodbath; however, the FTSE was less convinced as investors digested a mixed bag of corporate updates.”
European shares meanwhile gained confidence, as the Eurozone shrugged off fears from earlier in the week surrounding Italy’s financial policies.
The German Dax and French Cac climbed 1.03% and 1.6% respectively.
Connor Campbell, financial analyst at Spreadex, said: “It appears that Italy, one of the key reasons why the region’s indices have struggled in October, is maybe responsible for Thursday’s gains, following reports that the country’s government is prepared to help out its banks struggling with rising bond yields.”
Shares in advertising giant WPP plunged after the firm trimmed full year guidance, reported lower than expected third quarter sales and confirmed that it wants to offload a stake in Kantar.
The company, which has been rocked by the departure of founder and chief executive Sir Martin Sorrell, saw like-for-like sales fall 1.5% in the three months to September 30, a worse performance than City analysts had forecast.
Shares dropped by 145.2p to 910.8p.
Also dragging on the FTSE, BT Group shares dropped 9.65p to 240.55p on the appointment of Philip Jansen as successor to chief executive Gavin Patterson.
Lloyds Banking Group shares were on the up after it reported a better-than-expected set of third-quarter results as the lender continues a strong run of form.
The bank saw a 7% fall in profits to £1.82 billion in the three months to September 30 after it was hit by increased restructuring costs.
However, the figure was above consensus estimates of £1.7 billion and total income for the quarter came to £4.69 billion, an increase of 1%.
Shares closed 1.06p higher at 57.72p.
Debenhams unveiled plans to axe up to 50 high street shops, putting around 4,000 jobs at risk, as the struggling department store chain swung to a near £500 million loss.
The move was greeted with a positive market reaction. Shares closed at 0.6p, or 7.04%, higher at 9.12p.
On the oil market, prices stabilised following an early sell-off in the wake of a widespread plunge in the stock markets.
A barrel of Brent crude was trading 1.11% higher at 76.48 US dollars.
The biggest risers on the FTSE 100 were Smiths Group, up 49.5p to 1,332.5p, IAG Group up 21.6p to 587.4p, Rolls-Royce up 32p to 872p and Imperial Brands up 98p to 2,743.5p.
The biggest fallers on the FTSE 100 were WPP down 145.2p to 910.8p, ITV down 5.95p to 145.2p, BT Group down 9.65p to 240.55p, and Randgold Resources down 214p to 6,198p.
