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FTSE 100 bounces back as pound slides

The London market has rebounded into positive territory as blue-chip stocks enjoyed an uplift after weak economic data caused sterling to sink.

The FTSE 100 Index closed up 39.13 points to 7,321.82, with multi-nationals reporting in US dollars or euros benefiting from the pound's slide against a host of major currencies.

Michael Hewson, chief market analyst at CMC Markets UK, said: "After a disappointing day yesterday the FTSE 100 has bounced back buoyed by a recovery in basic resource stocks, and a slide in the value of the pound, while broader European markets have lagged behind as investors stay cautious about political risk in Europe."

AstraZeneca and Rio Tinto climbed by 45p to 4,955p and 78p to 3,264.5p respectively, while HSBC lifted by 2.8p to 649.4p.

A hefty jump in the price of oil was also dragging energy stocks higher, with Royal Dutch Shell B up 22p to 2,192p and rival BP jumping 7.6p to 463.7p.

Brent crude rose by a heady 1.6% to 53.97 US dollars a barrel in anticipation that US crude stocks would decline.

Across Europe, Germany's Dax was 0.2% higher and the Cac 40 in France rose by 0.3%.

On the currency markets, sterling was down 0.4% against the US dollar at 1.243 and slipped 0.4% versus the euro at 1.165.

The UK currency deepened its losses after fresh tranche of economic data showed o utput in Britain's construction industry eased back in March following a slowdown in housebuilding.

The closely watched Markit/CIPS UK Construction purchasing managers' index (PMI) fell to 52.2 last month, down from 52.5 in February and below economists' expectations of 52.5.

A reading above 50 indicates growth.

It comes as separate PMI figures on Monday showed manufacturing output eked out its weakest growth in eight months for March following a slowdown in consumer goods production.

In UK stocks, precious metals miner Fresnillo was in the ascendency, climbing more than 2%, or 43p to 1,595p.

In a contrast of fortunes, supermarket giant Morrisons was the biggest faller, closely followed by rival Sainsbury's, as a report found that inflation was bumping up the prices of household staples.

Research from Kantar revealed that grocery inflation is up 2.3% versus the same time last year, with products such as butter, fish, tea and skincare all seeing price hikes.

It also showed that Morrisons had achieved the strongest sales growth out of the big four grocers in the 12 weeks to March 26, rising 0.3%.

Shares in Morrisons were down nearly 3%, or 6.8p to 230.9p, while Sainsbury's fell 5.8p to 257.4p.

Away from the top tier, fashion firm ASOS was on the back foot despite posting a jump in half-year profits, boosted by a significant surge in international sales following the collapse in sterling.

The online fashion retailer said pre-tax profits rose 14% to £27.3 million in the six months to February 28, while revenue increased 37% to £911.5 million.

Shares were off 6p to 5,971p.

The biggest risers on the FTSE 100 were Fresnillo up 43p to 1,595p, Shire up 114p to 4,752p, Rio Tinto up 78p to 3,264.5p, Anglo American up 29.5p to 1,238.5p.

The biggest fallers on the FTSE 100 were Morrisons down 6.8p to 230.9p, Mediclinic International down 19.5p to 691p, Associated British Foods down 62p to 2,539p, Sainsbury's down 5.8p to 257.4p

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