Pound drops as MPs fail to settle on Brexit plan B
The pound suffered losses on Thursday, as the mire of Brexit uncertainty took its toll.
Sterling fell 0.75% against the US dollar to 1.306. Versus the euro, the currency fell 0.54% to 1.163.
Fiona Cincotta, senior market analyst at City Index, said: “The pound declined across Thursday after Parliament failed to find a consensus for Plan B Brexit. With Plan A, Theresa May’s deal still in doubt, the indecision is weighing on demand for the pound.
“Theresa May will bring her deal back to the House of Commons for debate tomorrow. Despite Theresa May offering her resignation as the price to get the deal through, the DUP are still not playing ball.”
But the pound’s decline was good news for top-tier stocks in London, with multinational companies in demand owing to the beneficial exchange rate.
The FTSE 100 gained 40.14 points, or 0.56%, to finish the day at 7,234.33.
The mood across global stock markets was similarly bright, as hopes were lifted of a resolution to the trade dispute between the US and China.
But the optimism in American markets was dampened by poor economic growth data.
Connor Campbell, financial analyst at Spreadex, said: “Hopes that the latest round of US-China trade talks will yield substantial progress didn’t have much staying power, especially in the face of America’s worse than forecast final Q4 GDP number.
“At 2.2% the annualised figure was way short of the 2.6% previous reading and lower than the 2.4% expected by analysts, further contributing to the sense of unease surrounding the global economy.
The gloomy mood weighed on European markets, with the German Dax up just 0.08% and the French Cac dipping 0.09%.
In London, Debenhams got the green light to press ahead with a £200 million refinancing, paving the way for the likely wipeout of existing shareholders, including Mike Ashley’s Sports Direct.
Shares in the company dropped 0.71p to 2.09p. The company also announced that it would leave its head office in London and move into the upper floors of its Oxford Street branch, in a bid to cut costs.
Outsourcing giant Mitie saw shares come under pressure, dropping 10.8p to 139.2p after forecasting lower-than-expected annual profits and warning that orders shrank by around 10% over the past year.
Utility giant SSE has said it was continuing to work on “future options” for its retail supply arm after the collapse of its merger with Npower last year. The stock fell 17p to 1,203p.
Oil prices were lower after President Donald Trump intervened on Twitter, saying: “Very important that OPEC increase the flow of Oil. World Markets are fragile, price of Oil getting too high. Thank you!”
A barrel of Brent crude oil was trading at 67.62 US dollars, down 0.34%.
The biggest risers on the FTSE 100 were Ocado Group up 69p to 1,360p, NMC Health up 78p to 2,270p, DCC up 180p to 6,710p and Bunzl up 43.5p to 1,823.5p.
The biggest fallers on the FTSE 100 were Easyjet down 39p to 1,118p, National Grid down 29.1p to 855.1p, Schroders down 78p to 2,635p and Barratt Developments down 17.2p to 593.6p.