Sterling’s recovery holds back FTSE 100 as European peers make gains
The pound was up against the euro and US dollar.
A mild recovery by the pound weighed on the FTSE 100, which failed to benefit from a recovery in global stocks that lifted its European peers.
The blue chip index ended the day up just 0.19% or 14.33 points at 7386.94, while its continental counterparts including the French Cac 40 and German Dax climbed higher by 0.66% and 0.55%, respectively.
The FTSE 100 was impacted by sterling’s rise, having climbed 0.3% versus the euro to 1.120 and 0.16% against the US dollar to 1.319.
Investors shrugged off data showing that UK retail sales suffered their first annual decline since 2013, and instead focused on more buoyant monthly figures.
The 0.3% fall in sales volumes compared with a strong October last year, but was the biggest drop since March 2013, Office for National Statistics figures showed.
However, volumes increased by 0.3% on a month-on-month basis, with second-hand stores such as charity shops, auction houses, antiques and fine art dealers providing the largest contribution to the growth.
Connor Campbell, a financial analyst at SpreadEx, said: “Once again the FTSE had to sit at the side-lines and watch its peers party, with the UK index missing out on the wider market rebound.
“There were two main factors keeping the FTSE from joining in with the day’s gains: the pound and the commodity sector. The former managed to find the positives – of which there were few – in the first annual retail sales decline since 2013… as October’s month-on-month figure came in higher than forecast.”
In oil markets, Brent crude prices fell 0.6% to $61.45 per barrel as investors fretted over climbing US production levels as well as higher inventories that threaten to prolong the global energy glut.
In UK stocks, GKN shares tumbled 14.8p to 296p after revealing that its chief executive Kevin Cummings has left the company with immediate effect after it decided “the next stage of GKN’s development is best delivered under alternative leadership”.
Shares were also impacted by news that a review of its US aerospace plants has uncovered a further hit, with additional write-offs of between £80 million and £130 million.
Royal Mail rose 6.5p to 395.5p despite seeing half-year profits drop by nearly a third and warning that efforts to reach a deal with unions over workers’ pay and pensions could hit its financial performance.
However, revenues rose 2% to £4.8 billion, with the lion’s share of the growth coming from its Europe-focused parcel business General Logistics Systems (GLS), helping to offset flat revenues at its UK letters and parcels arm.
Prudential rose 20p to 1,880p as the insurance giant reported that new business profits jumped by nearly a fifth on the back of higher interest rates which bolstered sales across the US and Asia.
Virgin Money slid 14.4p to 260.6p. The challenger bank announced on Thursday that it was stepping into small business banking and would launch an SME savings account in January.
Just Eat jumped 21p to 824p after the Competition and Markets Authority officially gave the green light to its takeover of rival Hungryhouse.
The biggest risers on the FTSE 100 were Shire up 213.5p at 3,744p, Paddy Power Betfair up 405p at 8,820p, Convatec Group up 8.7p at 198.5p, and British Land Company up 22p at 618.5p.
The biggest fallers on the FTSE 100 were GKN down 14.8p at 296p, Royal Dutch Shell down 70.5p at 2,331p, Mediclinic International down 16p to 578.5p, and Royal Dutch Shell down 57.5p to 2,378.5p.