FTSE 100 supported by weaker pound as Brexit jitters persist
Sterling was down more than 0.4% versus the euro.
The FTSE 100 has emerged as a top performer among its European peers, having been boosted by an extended sterling sell-off linked to investor jitters around Brexit.
London’s blue chip index rose 0.8% or 59.52 points to 7,453.48 points, while continental indexes suffered.
The French Cac 40 and German Dax fell 0.23% each.
The weaker pound supported the FTSE 100’s rise, as many of its listed multinational firms tend to benefit when foreign currencies are stronger than the pound.
Sterling was trading lower by 0.2% versus the US dollar at around 1.335, and was down more than 0.4% versus the euro at 1.131.
David Madden, a market analyst at CMC Markets, said: “GBP/USD is in the red as the sell-off that started on Friday has run over into this week.”
While the sell-off started on the back of a slew of Office for National Statistics (ONS) data that revealed a mixed picture for the UK economy at the start of the fourth quarter, Mr Madden said that the current weakness in sterling was due to “traders’ nervousness surrounding Brexit”.
Speaking to MPs on Monday, Prime Minister Theresa May gave a clearer breakdown of where the UK was in relation to Brexit negotiations to date.
She said that Britain’s offer for its divorce bill for the EU – which is likely to be between £35 billion and £39 billion – would be off the table if the UK does not agree to a future partnership with Brussels.
In oil markets, Brent crude prices were up nearly 2% at $64.57 per barrel, amid news that the Forties pipeline would be closed after a crack was found.
It is a key pipeline that carries around 40% of the North Sea’s oil and gas.
In UK stocks, HSBC shares were up 18.5p to 751.7p after the US Department of Justice said it would ask a court to dismiss deferred criminal charges against the bank in light of its efforts to strengthen safeguards against money laundering.
HSBC originally signed the agreement in order to avoid charges for allegedly laundering millions of dollars from the likes of Mexican drug rings and countries that are currently under US sanctions.
Centrica shares were among the worst performers on the FTSE 100, ending the day down 2.6p at 141.5p.
It comes amid news that the British Gas owner has launched a European oil and gas exploration and production (E&P) joint venture, dubbed Spirit Energy, as part of a deal with Bayerngas Norge.
The new entity will contain Centrica’s assets in the UK, Netherlands and Norway and Bayerngas Norge’s in Norway, the UK and Denmark, with each firm owning 69% and 31% of the joint venture, respectively.
Away from the top tier, Hollywood Bowl shares jumped 13p to 203p as the ten-pin bowling operator reported a sharp rise in full-year pre-tax profit from £2.6 million to £21.1 million on the back of growing sales and new site openings.
The figures were also flattered by the absence of large exceptional items, which dragged down its performance last year.
The biggest risers on the FTSE 100 were WPP up 35p to 1,376p, HSBC Holdings up 18.5p to 751.7p, BHP Billiton up 30.5p to 1,372p, and Antofagasta up 20p to 913.5p.
The biggest fallers on the FTSE 100 were Whitbread down 106p to 3,888p, Centrica down 2.6p to 141.5p, Smurfit Kappa Group down 41p to 2,334p, and Marks and Spencer Group 4.8p to 314.2p.