Sterling wobbles but stocks steady as May sets out exit timetable
The pound endured a turbulent ride as markets reacted to Theresa May’s decision to step down as prime minister in the first week of June.
Sterling rose against the dollar to $1.272 and to €1.1362 against the euro after she laid out the timetable for her departure from Downing Street.
The gains were shortlived however, with the pound falling as Boris Johnson, the front-runner to succeed her, set out a hardline stance hours later, saying that the UK must leave the EU by the end of October with or without a deal. Sterling finished the day flat against the euro and up against the dollar at $1.2698.
The FTSE 100 ended up 46.69 points at 7277.73 as traders said that Mrs May’s move had already been priced in by the markets.
Vodafone was among the risers of London’s blue chip index after HSBC upgraded the telecommunications giant from “hold” to “buy”. The analysts said that Vodafone’s prospects “should get progressively brighter” in time for its first quarter update.
The company announced a 40pc cut to its dividend earlier this week as it looked to shore up cash to fund its hefty €18bn (£15bn) takeover of Liberty Global cable networks in Germany and central Europe. It rose 2.8p to 126p.
Miner Anglo American was up 43p to £19.44 from a ratings upgrade after RBC Capital raised the company to “top pick” from “outperform”. Among the mid caps, Royal Mail came off its record low after Goldman Sachs upgraded the postal monopoly to “buy” from “neutral”. Analysts argued that the company’s current valuation didn’t reflect its potential to turn itself around as it seeks to become a parcel-led business.
They said that the company was showing a “clear shift of focus towards the faster growing part of the business”.
It is hoping to become “a parcels company that also delivers mail, from being a mail company that also delivers parcels,” they added.
Royal Mail revealed plans to slash its dividend on Thursday to fund a turnaround effect after being hurt by a reduction in the number of letters being sent in recent years. The upgrade sent shares up 12.7p to 210p.
Shares in Dublin-based media company Tarsus rocketed 119p to 431p after it agreed to be bought out by private equity firm Charterhouse for £561m, or 425p a share cash.
Retailers were boosted by sales in the first three months to April coming in 1.8pc higher compared to the previous three months. Clothes retailers enjoyed a 2.2pc rise in sales in the period helping shares in
Marks & Spencer to rise 3.2p to 246p while Next added 82p to £57.80.
Finally, Redhall shares were suspended on the junior market AIM after the specialist engineer failed to secure “additional funding capacity” from shareholders and creditors. The Wakefield-based company has been negotiating with creditors to help ease its cash flow problem.