Markets boosted by weak pound after Brexit jitters
The FTSE 100 had a decent day, but mainly due to its internationally-focused companies enjoying falls in sterling.
The FTSE 100 benefited from a falling pound on Thursday, as Brexit jitters once again sent sterling down against the dollar.
The currency was given a slight boost following the announcement that Prime Minister Boris Johnson would seek an election on December 12 – but his plan was only confirmed once the stock market closed for the day.
At the closing bell, the FTSE 100 was up 67.51 points at 7,328.25.
As ever the FTSE rubbed its hands in glee at the site of sterling's struggles. Connor Campbell, SpreadEx
Once again, a falling pound helps internationally focused companies that make up the majority of the index because they tend to work in dollars and foreign investors see the stock as “cheaper”.
The pound was down 0.4% at 1.2855 dollars, and was down against the euro by 0.2% at 1.1573.
The Cac 40 in Paris and the Dax 30 in Frankfurt both ended up 0.6%.
Connor Campbell, financial analyst at SpreadEx, explained: “As ever the FTSE rubbed its hands in glee at the site of sterling’s struggles.
“Combine that bit of schadenfreude with a healthy showing from its commodity and housing sectors, and a sharp 5.3% increase from AstraZeneca – the pharma firm reported its fifth straight quarter of revenue growth this Thursday, beating estimates in the process – and the UK index shot up by 0.9%. That leaves the FTSE above 7,320 for the first time since the October-opening bloodbath.”
In company news, RBS kicked off the UK bank reporting season with a third quarter loss, after taking a £900 million hit from PPI claims.
The part-nationalised lender reported pre-tax operating losses of £8 million for the three months to September 30, down from £961 million a year ago. Shares closed down 7.8p at 225.9p.
The Competition and Markets Authority announced it was considering whether to investigate Ovo’s deal to buy SSE’s retail business for £500 million. Shares in SSE fell 6.5p to 1,316p.
Officials have set a deadline of November 6 before they make a final decision over whether the deal could lead to “a substantial lessening of competition” in the UK energy market.
Investment platform AJ Bell, whose shares have become a favourite with investors in a turbulent time for rival Hargreaves Lansdown, has boosted the number of customers it attracted in its first year since going public.
The investor said it had brought in 17% more customers, increasing the total to 232,066, with assets under administration reaching £52.3 billion, a 13% rise.
Shares continued to rise, closing up 4p at 375p.
Finally, Shoe Zone shares jumped 12p, or 10.1%, to 130.5p after the retailer said it had made “strong progress” despite challenging trading conditions in the second half of the financial year.
Revenues at the high street chain rose 0.8% to £161.9 million for the year to October 5.
The top risers on the FTSE 100 on Thursday included M&G, up 13p to 227p, Astrazeneca, up 384p to 7,303p, Aveva, up 194p at 4,114p, Scottish Mortgage Investment Trust, which rose 23p to 495p, and Relx, up 70.5p to 1,840p.
The main fallers on the index were NMC Health, which fell 127p at 2,513p, Rolls Royce, down 24.6p at 702p, Royal Bank of Scotland, which saw a drop of 7.8p to 225.9p, Evraz, down 12.6p at 380.4p, and ITV, whose shares fell 3.05p at 134.65p.