Pound jumps on vaccine news but pushes FTSE down

Simon Neville, PA City Editor

Positive news that the UK Government aims to vaccine all under 50s by May did enough to push the pound up as markets closed on Friday.

But the strong pound and underwhelming jobs data from the US failed to liven up the FTSE 100, with the internationally focused index closing the day down 14.39 points, or 0.22%, at 6503.72.

By comparison, the FTSE 250 index of more UK-focused firms enjoyed a solid boost, up 1.24%, as traders hoped the news could see an end to lockdown restrictions and economic recovery over the horizon.

The pound was up 0.32% against the dollar as markets closed at 1.372. It fell 0.29% against the euro to 1.1395.

Typically when the pound is strong against the dollar, the FTSE 100 falls as the value of shares to dollar-denominated investors look more expensive.

But the market can also face a knock if US economic data appears uninspiring, as was the case on Friday with the latest US non-farm payrolls.

David Madden, market analyst at CMC Markets UK, said: “The US non-farm payrolls report was broadly negative as the headline reading showed that 49,000 jobs were added last month, just below the Reuters consensus estimate of 50,000, while Bloomberg’s survey was 100,000.”

He added: “On a yearly basis, average earnings came in at 5.4%, unchanged on the month as the last report was revised up from 5.1% to 5.4%.

“A high earnings metric could be a sign that a relatively large number of lower income workers have left the labour market.”

In company news, Whitbread shareholders enjoyed the news that the UK Government would be mass booking hotels to launch quarantine restrictions for travellers arriving to the country.

The Premier Inn owner’s shares closed the day up 160p, or 5.13%, at 3,280p.

French Connection revealed it has been targeted with two takeover approaches from retail investor Spotlight Brands, with backing from restructuring and investment firm Gordon Brothers, and another from Go Global Retail.

Valuing the business at about £15 million, shareholders looked keen with shares closing up 64%, or 10.05p at 25.7p.

Power generator specialist Aggreko also said it was being eyed up for a takeover, with a consortium made up of UK-based private equity firm TDR Capital and infrastructure investment manager I Squared Capital US offering 880p a share.

The deal was not ruled out by Aggreko and shares closed the day up 209p, or 33%, at 844p.

Insurance group Beazley announced it will start paying a dividend in 2021, despite swinging to a loss due to claims over cancelled events as a result of lockdowns and restrictions.

Investors were happy with the dividend return, with shares closing up 48p, or 14.9%, at 369.2p.

Online travel firm On The Beach warned demand for summer holidays has been “very weak” as customers remain cautious despite the rollout of vaccines.

The London-listed firm said it expects booking demand to be low until “restrictions are lifted and vaccine deployment is more widespread, both in the UK and our major travel destinations”.

Shares were flat at 355p.

The biggest risers on the FTSE 100 were Whitbread up 160p at 3,280p; Glencore up 11.8p at 259.2p; Natwest up 6.5p at 170.35p; British Land up 16.2p at 458.9p and Pershing Square up 85p at 2,570p.

The biggest fallers on the FTSE 100 were Johnson Matthey down 127p at 2,882p; Experian down 83p at 2,637p; DCC down 166p at 5,700p; National Grid down 20.8p at 851.4p and Aviva down 8p at 341.8p.

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