Markets slide as sterling bounces back

The London markets slumped as sterling made its first gains for five days, bouncing back from a two-year low.

The FTSE 100 closed 59.99 points higher at 7,586.78 points at the end of trading yesterday.

The value of the pound moved higher against the dollar ahead of the predicted US rate cut, although it dipped against the euro.

Connor Campbell, financial analyst at Spreadex, said: “Somewhat against the odds, the pound rebounded yesterday, a lack of good news not preventing the currency from dragging itself away from the week’s multi-year lows.

“This left the FTSE, which received a huge bump from sterling’s panic – alongside Monday’s merger and acquisition action from Just Eat and the London Stock Exchange – in quick retreat.”

The pound was up 0.5% at 1.221 versus the US dollar, and down 0.26% at 1.112 against the euro.

The Dow Jones opened marginally higher as US stocks held steady ahead of the Federal Reserve meeting which was expected to reveal a cut to rates.

The German Dax increased by 0.34%, and the French Cac rose by 0.14%.

In stocks, housebuilder Taylor Wimpey saw shares dive after it reiterated warnings over rising build costs as it reported a drop in half-year profits.

The company posted a 9.4% drop in underlying pre-tax profits to £299.8 million for the six months to June 30 as rising build costs took their toll.

Shares in Taylor Wimpey closed 14.75p down at 161.8p.

The price of a barrel of Brent crude oil rose by 0.12% to 65.04 US dollars.

The biggest risers on the FTSE 100 were Next, up 448p at 6,064p, Rentokil, up 22.8p at 435p, Centrica, up 2.5p at 76.08p, and IAG, up 9.6p at 424.4p.

The biggest fallers on the FTSE 100 were Taylor Wimpey, down 14.75p at 161.8p, Fresnillo, down 52.6p at 601p, St James’s Place, down 59p at 984p, and Land Securities, down 29.2p at 796.2p.