Monday 24 September 2018

London’s blue-chip index makes gains on the back of weak pound

Sterling has been falling against the US dollar due to expectations of delays to interest rate rises.

The FTSE 100 made gains on the back of the weak pound (PA)
The FTSE 100 made gains on the back of the weak pound (PA)

By Helen Cahill, Press Association City Reporter

London’s blue-chip index made gains on Monday as the pound continued to fall on expectations that the Bank of England would delay an interest rate rise.

The FTSE 100 climbed 30.7 points to 7,398.87 over the session, while the pound fell by 0.36% against the US dollar to 1.395.

The pound was initially knocked last week after Bank of England governor Mark Carney said several Brexit-related events would impact rate rises, signalling that there would only be gradual increases.

Mike Hewson, chief market analyst at CMC Markets, said: “The pound is now down for five days in a row and has given up all of its gains in April, in less than the time it took to make them.”

Against the euro, the pound rose 0.18% to 1.141.

In oil markets, Brent crude prices climbed 0.89% to 74.24 US dollars per barrel.

Prices have been in flux since Friday, when US President Donald Trump said the Organisation of Petroleum Exporting Countries (Opec) was keeping prices “artificially high”, fuelling speculation that he might take action against the group.

In UK stocks, Capita’s share price surged despite its chief executive Jon Lewis announcing a £513 million loss. He also said the firm was tapping investors for £700 million.

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The proceeds of the rights issue, part of a major overhaul, will be used to reduce Capita’s debt and make investments.

Under the new strategy, the outsourcer is also targeting annualised cost savings of an initial £175 million by the end of 2020 and around £300 million from disposals in 2018.

The group was hammered on the stock market earlier this year after warning over profits, but by the close on Monday its shares soared 13.14% or 21p to 180.8p.

Shares in Clarkson tumbled as the shipping services giant warned over profits after being blown off course by a “challenging environment”.

The FTSE 250 firm said profits for both the first half and the full year are “anticipated to be materially below those of last year”.

Clarkson blamed choppy conditions in shipping and offshore capital markets, which resulted in transactions being pushed back.

By the end of the session, shares were down by 17.87% or 555p to 2,550p.

Carpetright’s biggest shareholder, Meditor Capital Management, upped its stake in the retailer on Monday, just days before landlords and creditors vote on a rescue deal for the firm.

Meditor upped its stake in Carpetright from 16.5% to 29.99% on Monday, just shy of the threshold at which it would have to make a formal takeover bid for the retailer.

Meanwhile, another major shareholder, Franklin Templeton, reduced its holding from 16% to 1.7%. Shares fell 2.5p to 34.5p by the market close.

Culture Secretary Matt Hancock has said he is considering intervening in the planned purchase of the Express and Star national titles by Trinity Mirror. The company’s shares fell 1.8p to 82.6p by the end of trading.

The biggest risers on the FTSE 100 were St James’s Place up 37p to 1,146.5p, Smith and Nephew up 37p to 1,389p, Old Mutual up 6.6p to 249.2p and Experian up 33.5p to 1,640p.

The biggest fallers on the FTSE 100 were NMC Health down 128p to 3,560p, Bunzl down 55p to 2,075p, WPP down 28.5p to 1,118p and National Grid down 16.4p to 796.5p.

Press Association

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