Markets remain muted despite Yellowhammer warnings


In yet another sign that London’s blue-chip index rarely reacts to domestic events, the FTSE 100 maintained its recent five-week highs on Thursday, as investors sat on their hands.

The Government published its Yellowhammer no-deal Brexit planning document, with various warnings about fresh food delays, medicine shortages and fears about a lack of preparedness by British businesses.

But the FTSE 100 barely moved, closing the day up 6.64 points at 7,344.67.

Traders appeared more interested in developments overseas – particularly on the continent, where the European Central Bank’s outgoing president Mario Draghi gave a parting gift of a new stimulus package and interest rates cut.

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He is replaced by IMF head Christine Lagarde in November.

The decision was already heavily flagged, giving the euro a wobble at first, but ending the day strengthened against the dollar and pound.

Connor Campbell, financial analyst at Spreadex, explained: “Initially the euro was shaken by the confirmation of the central bank’s long-suspected plans.

“However, once it had time to properly dig through the details it was less concerned, swapping a 0.4% decline against both dollar and pound for gains of 0.4% and 0.2% respectively.

“That’s because the plans have been described as ‘less generous’ than first thought, with a certain amount of disappointment that the package wasn’t more robust.”

The weakening dollar also helped the pound continue its climb back from record lows against the currency, with a pound worth 1.2349 dollars – up 0.16%.

Against the euro, the pound fell 0.29% to 1.1166.

There was also optimism on events in the US and China, where both sides in the long-running trade conflict stepped back from introducing more tariffs on goods and revealed further exemptions to the tariffs already in place.

In company news, Morrisons gave a reassuring update to the market that suggested consumer confidence may be improving. Bosses also revealed they would be paying out the second special dividend of the year to shareholders.

Investors reacted positively, sending shares up 9.1p, or 4.7%, at 203.1p – although it remains some way off February highs of 245p.

British American Tobacco revealed 2,300 jobs are being cut worldwide amid a major overhaul to invest in vaping and new products. However, shareholders appeared unfazed, with shares closing up 30p at 3,073p.

N Brown, the fashion retailer behind brands Jacamo, Simply Be and JD Williams, expects to put aside up to £30 million extra to deal with PPI claims, after seeing related inquiries surge tenfold in the run-up to the deadline. Shares closed down 2.5p at 108p but recovered significantly from the 10% fall during the morning.

And finally, investors reacted positively to a strong set of results from rail app firm Trainline, after bosses upped its full-year sales outlook thanks to a surge in UK ticket sales. Shares closed up 34p at 482p.

The biggest risers on the FTSE 100 were Morrisons up 9.1p at 203.1p; Fresnillo up 749.4p; Associated British Foods up 2,300p; Anglo American 1,932.8p and Centrica up 74.78p

The fallers were ITV down 5.45p at 120.15p; NMC Health down 102p at 2,816p; Bunzl down 65p at 2,097p; Whitbread down 115p at 4,429p and Intercontinental Hotels down 130p at 5,037p.