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FTSE 100 index comes within whisker of recording all-time high

Published 04/10/2016

The FTSE is within sight of its record high
The FTSE is within sight of its record high

London's premier index came within a whisker of recording an all-time high, after smashing through the 7,000 mark as the pound plunged to a new 31-year low against the dollar.

More than £23 billion was added to the value of top-flight firms, as the FTSE 100 Index leapt 1.3% - or 90.82 points - to 7074.34, close to a record close of 7,104 in April last year.

At one stage, the London market touched 7,121.93, just shy of the record intraday high of 7122.7.

The FTSE 250 jumped 158.55 points or 0.87% to reach its highest-ever level of 18,342.07, with stocks buoyed by further falls in the value of the pound.

Sterling has been hammered after Prime Minister Theresa May pledged to kick start the Brexit process by the end of March next year, sparking fears the Government will strike a deal that leaves Britain out of the single market.

The pound fell 0.8% against the greenback in afternoon trading to 1.272 US dollars, its lowest level since 1985.

Sterling was also down 0.7% at 1.136 euros.

Foreign companies listed in London have seen their shares rocket by the pound's tumble as it boosts their earnings when they are translated back into sterling.

Prime Minister Theresa May played down the significance of volatility in sterling, telling the BBC that "currencies of course go up and down".

"If you stand back and look at the fundamentals of our economy, which are strong, if you look at the other economic data that has been around in recent weeks, if you look indeed at the most recent forecasts now coming out for growth in our economy this year, all of that is more positive than people had expected it to be and predicted it to be," she added.

The pound failed to gain a fillip from industry figures showing construction activity returned to growth in September on the back of a housebuilding revival, with attentions firmly on the Brexit concerns.

The closely watched Markit/CIPS construction purchasing managers' index (PMI) hit 52.3 last month, up from 49.2 in August and above economists' expectations of 49.

Across Europe, Germany's Dax was up 1% and the Cac 40 in France rose 1.1%.

The price of oil was up 0.6% to 51.18 US dollars amid reports that Iran energy's ministry will travel to Russia to present oil deals to Russian firms.

In UK stocks, firms which make large amounts of sales in dollars were among those driving the FTSE 100 higher, such as educational publisher Pearson, with a 5% gain, up 39.5p to 802.5p.

This also provided a boost to aircraft engine maker Rolls-Royce, ahead by 3% or 23p to 760.5p.

However, precious metal stocks took a tumble as investors pulled out of safe havens, with Rangold Resources and Fresnillo down 460p to 7,330p and 103p to 1,724p respectively.

The biggest risers on the FTSE 100 Index were Provident Financial up 208p to 3,320p, Intertek Group up 185p to 3,727p, Pearson up 39.5p to 802.5p, and Standard Life up 11.2p to 358.5p.

The biggest fallers on the FTSE 100 Index were Randgold Resources down 460p to 7,330p, Fresnillo down 103p to 1,724p, Polymetal International down 43.5p to 928p, and easyJet down 16p to 990p.

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