Wednesday 19 September 2018

FTSE 100 boosted by sterling slump

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

Britain's top share index climbed to a near eight-week high on Tuesday, boosted by a slide in the pound after weaker construction sector activity and rumbling uncertainty over Brexit negotiations.

The blue-chip FTSE 100 index ended the day up 0.4pc, outperforming European markets.

The pound's tumble to a three-week low drove gains in the index dominated by foreign-earning international firms.

In Ireland the Iseq close up 0.49pc at 6,912.58, helped by gains for Ryanair after it announced September traffic figures.

In the UK construction sector activity fell in September, and comments from UK Brexit minister David Davis at the Conservative Party conference added to uncertainty for sterling traders.

"With the makeup of the eventual Brexit deal still unknown, there has been knock-on volatility in sterling and therefore the FTSE 100 - this makes foreign investors more cautious," said Edward Park, investment director at Brooks Macdonald.

The euro came off its six-week low on Tuesday as markets consolidated positions after a selloff, though investors grew cautious about the single currency's outlook in the coming months on rising political uncertainty in Europe.

The unexpected outcome of the German election, where a weakened Angela Merkel must put together a coalition and Sunday's violence-marred independence referendum in the Spanish region of Catalonia has put the brakes on euro-bullish trades, with markets increasingly looking for the single currency to test the July lows of around $1.15. World shares extended a run of record highs on Tuesday on signs of strong economic growth, while the dollar was slightly weaker after a three-week rally and before several days of heavy US data.


Irish Independent

Business Newsletter

Read the leading stories from the world of Business.

Also in Business