Sterling climbs as investors abandon US dollar amid Trump presidency fears
The FTSE 100 slumped and the pound climbed to a five-week high as investors abandoned the US dollar during Donald Trump's first days in office.
Sterling rose 1% against the dollar to 1.248, its highest level since December 16. Against the euro, the pound rose 0.6% to 1.162.
Sterling's rise helped push the FTSE 100 lower by 0.66% or 47.26 points to close at 7,151.18.
Multinational stocks on the blue chip index tend to benefit when international currencies are stronger.
While Brexit-related speeches by Prime Minister Theresa May buoyed sterling last week, the currency's gains on Monday were driven by weakness in the dollar
SpreadEx financial analyst Connor Campbell said: "The greenback... seems to have been shaken both by the apocalyptic tone set by Trump at his inauguration, and the global protests that greeted the former Apprentice host's ascension to the highest office in the land."
The US dollar index, which is measured against a basket of currencies, slid to its lowest since the start of December.
Mr Trump's inauguration also sent safe haven assets higher, including gold, which rose 0.7% to 1,217.10 US dollars (£974.69) per ounce.
It helped push miners to the top of the FTSE 100, including Antofagasta up 27.5p to 789.5p, Fresnillo up 48p to 1,450p, Anglo American up 19p to 1,308p, and Glencore up 2.05p to 320.4p.
Investors were also digesting the UK Government's industrial investment plans which included a £556 million boost for the so-called "northern powerhouse", an overhaul of technical education and £170 million cash for a new emphasis on science, technology, engineering and innovation.
Looking ahead, UK markets were anticipating a key Supreme Court decision on Tuesday that will determine whether Mrs May has the right to trigger Article 50 without a vote by Parliament.
Across Europe, the French Cac 40 and German Dax closed lower by around 0.6% and 0.7% respectively.
In oil markets, Brent crude prices fell 0.5% to 55.16 US dollars (£44.16) per barrel, after the US oil rig count rose last week, stoking fears that US production could ultimately offset supply cuts introduced by Opec in a bid to raise prices.
In UK stocks, Paddy Power Betfair shares plunged 380p to 8,295p - and the bottom of the FTSE 100 - after Mr Trump's shock election victory and unfavourable sporting results dented takings to the tune of £40 million in the fourth quarter.
Lloyds Banking Group shares fell 0.67p to 64.4p following news that the bank had been hit by a three-day cyber attack designed to overwhelm the bank's systems and disrupt its digital services earlier this month.
The series of distributed denial of service (DDos) assaults came from overseas servers and affected the Lloyds, Halifax and Bank of Scotland brands.
Bovis Homes Group was one of the biggest risers on the FTSE 250 following reports that one of the company's biggest shareholders, Schroder Investment Management, has been pushing the company to merge with its rival Berkeley Group Holdings.
Bovis shares jumped 23.5p to 820.5p while Berkeley rose 42p to 2,829p.
The biggest risers on the FTSE 100 were Antofagasta up 27.5p to 789.5p, Fresnillo up 48p to 1,450p, easyJet up 32p to 1,076p, and Capita up 8.5p to 522p.
The biggest fallers were Paddy Power Betfair down 380p to 8,295p, Dixons Carphone down 8.9p to 336.1p, Royal Bank of Scotland Group down 5p to 215.9p, and BP down 11.2p to 487.15p.