FTSE 100 soars as investors move to take advantage of plunging pound
London's top flight index has reached record heights after investors piled into UK stocks in response to the plunging pound.
The FTSE 100 Index soared just shy of 100 points to secure a new mid-session high of 7,362.34, as sterling sank against the US dollar and the euro.
Sterling's slump since the Brexit vote has proved beneficial for multinational companies listed on the London market as many tend to benefit from earnings in currencies, such as the US dollar, which are performing better than the pound.
The UK currency was suffering after the US dollar strengthened and a fresh tranche of UK manufacturing data showed an unexpected slip in February as output and new orders slowed.
Sterling was down 0.7pc versus the greenback at 1.228 and 0.2% lower against the euro at 1.167.
The Markit/CIPS UK Manufacturing purchasing managers' index (PMI) said output showed a reading of 54.6 in February, down from 55.7 in January and below economists' expectations of 55.6.
The FTSE 250 Index, which is made up of UK firms deemed a better gauge for the domestic economy, rose 187.18 points to 18,960.16.
Connor Campbell, financial analyst at Spreadex, said concerns about Brexit have been pushed to the background as the London market takes its lead from America.
"I don't think there is much reason for the FTSE to be where it is in itself. There is nothing in the UK to push it that high.
"It is taking its cues from America, although the optimism in the US is not based on much.
"There was not a lot of detail in Donald Trump's speech apart from a reiteration of his trillion US dollar infrastructure spend.
"However, the tone of the speech wasn't the usual aggressive Trump. It was a lot more presidential, which reassured the markets.
"The weakened pound is what has been helping the FTSE 100 Index higher.
"Recently it hasn't slumped enough, but dropping below the 1.23 mark against the US dollar has made the difference.
"The US dollar is also strengthening because there is every chance that there is going to be a rate hike from the US Federal Reserve on March 15."
Across the Atlantic, the Dow Jones Industrial Average was up 1.1% shortly after the opening bell, with the S&P rising 1pc and the Nasdaq climbing 0.7pc.
European markets were also racing ahead, with the Cac 40 in France and German's Dax soaring 1.9pc and 1.7pc respectively.
The London market embarked on a remarkable winning streak in January - notching up 12 record closes on the bounce - as investors cheered President Trump's economic policies.
Global markets received another lift from the billionaire tycoon on Wednesday after his first speech to the US Congress saw him strike a less confrontational tone and pledge to reform taxes, slash red tape and ramp up spending on defence and infrastructure projects.
The positive reception to his speech, coupled with the growing expectations of a US interest rate hike later this month, sent the Dow Jones above 21,000 points for the first time in its history.