Lon­don stocks slide as pound soars to high­est level since Brexit

Arab News - - BUSINESS -

LON­DON: The Lon­don stock mar­ket slid Fri­day as in­vestors shrugged off news of a ter­ror at­tack in the Bri­tish cap­i­tal and in­stead took their cue from the surg­ing pound.

Ster­ling shot up af­ter a Bank of Eng­land pol­i­cy­maker sig­nalled a rate hike for “the com­ing months,” af­ter UK bor­row­ing costs were this week left on hold at a record-low 0.25 per­cent.

Com­ments from BoE pol­i­cy­maker Gert­jan Vlieghe echoed the cen­tral bank’s sig­nal this week that the first rate in­crease in a decade could come in “com­ing months,” push­ing the pound past the $1.36 mark for the first time since Britain voted to leave the EU.

That left it up over 1.5 per­cent and a full two cents above the $1.34 it touched af­ter Thurs­day’s BoE pol­icy de­ci­sion, and it put ster­ling on track for a 3.3 per­cent weekly gain on a trade-weighted ba­sis — its best per­for­mance since Fe­bru­ary 2009.

Mar­kets re­acted lit­tle mean­while to an at­tack on a Lon­don Un­der­ground train at Par­sons Green, south­west Lon­don, which po­lice are treat­ing as a ter­ror­ist in­ci­dent af­ter a num­ber of peo­ple were in­jured.

“Lon­don­ers and mar­kets alike take these sorts of in­ci­dents in their stride,” ETX Cap­i­tal an­a­lyst Neil Wil­son told AFP.

“The FTSE’s drop to­day is by and large about the pound’s rally, as that de­presses the for­eign earn­ings of lots of the big blue chips.”

In late morn­ing deals, the Bri­tish cap­i­tal’s FTSE 100 index of top com­pa­nies slid 1.1 per­cent as ster­ling re­bounded.

“The FTSE is suf­fer­ing at the hands of a ram­pant pound,” added IG an­a­lyst Joshua Ma­hony.

Euro zone trad­ing was muted on Fri­day with Frank­furt and Paris stocks hold­ing steady ahead of the week­end pause.

Car­los Ghosn, chair­man and CEO of the Re­nault-Nis­san-Mit­subishi al­liance, sees an uptick in in­ter­est in elec­tric cars. (Reuters)

Shares listed on the Lon­don Stock Ex­change fell on Fri­day. (Reuters)

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