Market edges higher after sterling falls

Market report Perry Gourley

The FTSE 100 edged slightly higher as sterling fell amid further strengthening of the dollar.

The pound fell as much as 0.8 per cent against the US dollar to $1.23 at one point before recoverng some of its lost ground in afternoon trading. The FTSE 100 closed up 5.52 points at 7,017.16.

The slight recovery in sterling came after Prime Minister Theresa May suggested the UK could continue to pay into the EU budget after Brexit, provided the funds “give value for money and meet UK government objectives”.

Neil Wilson, a senior market analyst at ETX Capital, said: “Her soft Brexit message seemed to reassure markets that the UK economy is not heading towards the much-feared cliff edge and that has put a bit of a floor under cable for the moment.”

The pound was otherwise feeling pain from a climbing US dollar, as investors continued to hold out hope for fiscal stimulus from president-elect Donald Trump and further rate hikes from the US Federal Reserve.

In stocks, Royal Dutch Shell’s B shares were up 15.5p at 2,304.5p after the oil major reported it had sold a 31.2 per cent stake in Japan’s Showa Shell Sekiyu for $1.4 billion.

Shares in BP rose 1.1p to 490.8p after the company said it would inject almost $1bn.

Speedy Hire shares rose 2p to 54p on news that it has snapped up Midlands equipment firm Lloyds British Testing out of administration. The biggest risers on the FTSE 100 included Hikma Pharmaceuticals, up 69p at 1,861p, Reckitt Benckiser, up 180p at 6,794p, and Randgold Resources, up 130p at 5,705p. The oil and gas firm confirmed it had received a possible offer from a suitor after media reports about a takeover emerged over the weekend. Shares in the Glasgow-based medical firm came under pressure despite it saying it was on track to grow its revenues by five-fold within five years.