FTSE sets new high as shrinking Tory lead causes plunge in pound

LONDON’S benchmark index closed at a new all-time high and sterling suffered its worst falls since January after an opinion poll showed the Conservatives’ lead over the Labour Party has narrowed sharply in the run-up to the General Election on June 8.

A Yougov poll published late on Thursday, the first since the Manchester terrorist attack, put the Conservative Party on 43pc, down one percentage point from a week ago, while Labour gained 3 points.

The opinion poll jitters undermined the pound, causing a sharp drop in the currency. It dropped by more than 1.4pc against the US dollar to a one-month of $1.2775, while it sank to its lowest level in two months against the euro of €1.1428.

That helped the FTSE 100 scale new peaks, cementing its fifth straight week of gains, as its European peers underwhelmed. With 60pc of FTSE 100 companies’ revenues coming from outside the UK, a weaker pound supports exportoriented firms, while making shares cheaper for overseas investors. Jasper Lawler, of London Capital Group, said: “The prospect of currencye nhanced foreign earnings is outstripping the political uncertainty.”

The blue chip index closed 29.92 points, or 0.4pc, higher at 7,547.63, while the mid-cap index broke 20,000 for the first time. The climb from 19,000-20,000 has taken the FTSE 250 index less than three months, compared with its previous

1,000 point gain which took almost two years.

Broad-based gains on the blue-chip index came from

Rolls-royce, which rose 21.5p to 873p, British American Tobacco, 96p higher to £55.914, and

Johnson Matthey, up 80p to £31.75. A strong trading update and supportive broker notes lifted shares in media group Informa 38p to 688.5p. Glaxosmithkline gained

25.5p to £16.44, underpinned by a rating upgrade. Berenberg raised its rating to “buy” and lifted its price target to £18.85 as it believes the risks to the group’s HIV business, Viiv, from its competitor Gilead’s newest products are “skewed to the upside”.

On the other side, banking stocks faltered amid concerns over the political situation in Italy and the country’s pressured regional banks. Lloyds fell 1.4p to 71.7p, Royal Bank of

Scotland dropped 4.4p to 261.6p and Barclays shed 2.4p to 211.7p.

Credit data firm Experian lost 5p to £16.41 after Deutsche Bank cut its rating to “sell”, citing weak growth, while Shire tumbled 86.5p to £46.52 on a rating downgrade from Bernstein. Away from the blue chips,

Restaurant Group leapt 33.2p to 350.6p on an upbeat trading update, while engineer Spirax-sarco bounced 450p to an all-time high of £57.60 after it announced the acquisition of Chromalox for $415m.

Britvic was among the biggest mid-cap drags, down 18p to 705p, after Pepsico, one of its top five shareholders, offloaded its 4.5pc stake in the business. Finally, Aim-listed

Strategic Minerals slipped 7.2pc after announcing a maiden profit of £351,000.