Business World

Monday 24 July 2017

Weak pound sends FTSE to all-time high

Traders work on the floor of the New York Stock Exchange (NYSE)
Traders work on the floor of the New York Stock Exchange (NYSE)

Ellie Donnelly

The UK's benchmark FTSE 100 index topped 7,500 for the first time ever after data showed higher UK inflation in April, and markets in the US hit record intraday highs.

In London the FTSE 100 closed at the highest level in its 33-year history, ending the second session in a row at a record high.

The big drivers were a weaker pound however, and strong UK inflation numbers, with higher living costs seen to favour shares over bonds.

US stocks pulled back on Tuesday after the S&P 500 and the Nasdaq Composite hit record intraday highs as a decline in healthcare stocks offset gains in technology.

The main indexes have been trading near record levels, supported largely by strong first-quarter earnings, but global geopolitical tensions and developments in Washington could unsettle the market's record-setting spree.

In Dublin the Iseq index closed at 7015.52, down slightly on the day and off its recent highs.

Buoyant markets mean money managers are increasingly concerned stocks are overvalued.

A survey by Bank of America Merrill Lynch found the share of portfolio managers who think equities are overvalued rose from 32pc to 37pc in May.

It hasn't dented activity however. In the US, a report from the Federal Reserve showed US factory output in April rose at its fastest clip in three years, supporting a view that economic growth was rebounding in the second quarter after a sluggish start to the year.

In Dublin, FBD and Hostelworld, both up more than 3pc yesterday, outperformed the generally sluggish tone. Heavyweights, CRH, Ryanair, Kerry and Paddy Power all moved down.

Irish Independent

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