Pound dives as MPs return to Westminster

Optimism over the Supreme Court ruling against the Government which led to cautious cheers from traders evaporated on Wednesday.

Most hoped the decision would remove some of the Brexit uncertainty that keeps hitting the markets, but the return of politicians to Westminster, screaming at each other across the House of Commons, spooked investors.

The pound took the biggest hit, down 1.1% against the dollar to 1.2363, with a 0.5% fall against the euro to 1.1286. All currency gains from Tuesday were wiped out.

Tobacco industry increases prices
Cigarette makers British American Tobacco and Imperial benefited from Philip Morris’s problems (Martin Rickett/PA)

Fiona Cincotta, senior market analyst at City Index, said: “Comments by the Attorney General that a motion for a general election will be brought to Parliament shortly has fanned fears that the UK could be heading to the polls with just five weeks to go until Brexit.

“For pound traders, that could be a lose-lose prospect; either Jeremy Corbyn takes the reins or Boris Johnson wins a mandate to push a no-deal Brexit through.”

The FTSE 100 – which is more internationally focused and tends to react to overseas events – closed the day virtually flat, down 1.44 points at 7,289.99.

However, it did spend most of the day lower as traders digested the news that US President Donald Trump could be facing impeachment charges.

Big tobacco had a good day on the markets, however, as investors piled into British American Tobacco (BAT) and Imperial Brands, as US rival Philip Morris’s mega merger with Altria collapsed.

BAT closed up 92.5p at 2,924.5p and Imperial closed up 45.5p at 2,065.5p.

At the bottom end, traders cashed in on the recent boost to TUI’s share price – following the demise of Thomas Cook – sending shares down 32.6p to 927p.

In company news, Sainsbury’s saw a small boost to its shares as bosses unveiled their latest five-year strategy to make savings of £500 million. Shares closed up 3.5p at 216.5p.

Online fashion retailer Boohoo continued its meteoric rise, revealing sales surpassed £1 billion in a 12-month period for the first time.

The teen fashion brand said revenues overall jumped 43% in the half-year to August 31, with underlying earnings up 53% to £60.7 million.

Pre-tax profits jumped 83% to £45.2 million. Shares closed up 1.6p at 267.4p, with most traders already expecting a decent set of numbers.

Aston Martin revealed it had raised 150 million US dollars (£121 million) through the issuing of a new bond to fund its first SUV. But with an interest rate of 12%, investors ran for the hills, sending shares down 24p to 550.8p.

The biggest risers on the FTSE 100 were British American Tobacco up 92.5p at 2,924.5p; Imperial Brands up 45.5p at 2,065.5p; Antofagasta up 15.8p at 881.2p; Sainsbury’s up 3.5p at 216.5p and Morrisons up 3.05p at 202p.

The biggest fallers were TUI down 32.6p at 927p; Ocado down 41p at 1,299p; Halma down 58.5p at 1,914p; Persimmon down 58p at 2,053p and Aveva down 96p at 3,564p.

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