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Sluggish day for sterling as energy 'sapped from European markets'

Published 25/11/2016

Trading was sluggish
Trading was sluggish

The pound struggled to find direction on Friday, despite solid data showing a rise in business investment, service sector growth and retail sales.

Sterling was flat against the dollar to 1.245, but fell 0.4% against the euro to 1.174.

Meanwhile, the FTSE 100 closed higher by 0.17% or 11.55 points to reach 6,840.75 points.

That is despite Britain's economic growth having been confirmed at 0.5% in the third quarter, as business investment and service sector output rose in the months following the EU referendum.

The Office for National Statistics said b usiness investment rose 0.9% to £44.2 billion in the third quarter, thanks to a increase in building project investments, while s ervices sector output grew 0.8% between July and September.

Later, the CBI's distributive trades survey showed high street sales grew at their fastest pace in more than a year in the 12 months to November, as colder weather prompted shoppers to stock up on winter clothes.

However, the solid raft of data did little to lift either the pound or the UK's blue chip index.

Connor Campbell, a financial analyst at SpreadEx said: "It's been a pretty sluggish end to the week; despite the Thanksgiving break being confined to the US, it helped sap a lot of energy from the European markets."

Investors are now looking ahead to a string of US data next week including non-farm payrolls and the all-important Federal Reserve meeting which could see policymakers raise interest rates, he said.

Across Europe, the French Cac 40 and German Dax closed higher, up 0.17% and 0.09%, respectively.

In oil markets, Brent crude prices dropped 2.6% to 47.55 US dollars per barrel (£38.18), as investors questioned the likelihood that a deal to cut or freeze oil supply could be reached at next week's Opec meeting in Vienna. Output restrictions would help buoy oil prices.

Sky shares topped the FTSE 100, rising 19.5p to 787p, after four of its non-executive directors bought nearly 20,000 shares in the company.

Next in line were AstraZeneca shares, which jumped 91.5p to 4,301.5p, as Liberum upgraded its stock to "buy" from "hold".

Shares in BHP Billiton fell 5p to 1,356p after the mining giant approved a a further 181 million US dollars (£145 million) to bankroll compensation and remediation programmes linked to the Samarco dam catastrophe in Brazil, which killed 19 people and displaced 700 last year.

Away from the top tier, fastjet shares dropped 1.88p to 14.12p as the loss-making airline's chairman announced his departure amid news that the company will be forced to raise fresh funding.

Fastjet said it is continuing to reduce its costs as part of a stabilisation plan, amounting to around 8 million US dollars (£6.4 million), which is expected to provide it with a boost early next year.

The biggest risers on the FTSE 100 were Sky up 29.5p to 787p, AstraZeneca up 91.5p to 4,301.5p, Unilever up 53p to 3,173p, and National Grid up 13.5p to 923.4p.

The biggest fallers on the FTSE 100 were Standard Life down 7.8p to 345.8p, Glencore down 5.3p to 283.3p, DCC down 100p to 6,100p, and Lloyds Banking Group down 0.91p to 58.77p.

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