FTSE’S slight rise as sterling loses ground

Market report Emma Newlands

Sterling lost ground against major currencies as investors cheered an upward revision to US growth and prepared for a state bailout of Italian lender Banca Monte dei Paschi di Siena (BMPS).

The pound hit a seven-week low against the US dollar, down 0.5 per cent at $1.228 after US GDP climbed to 3.5 per cent in the third quarter, revised higher from previous estimates of 3.2 per cent.

Euro strength also hit sterling, which fell 0.75 per cent to €1.176 as markets priced in the prospect of a bailout for BMPS, which earlier this week warned it could run out of cash within four months if it failed to secure fresh capital. Italian legislators are now expected to nationalise the struggling lender.

The FTSE 100 closed marginally higher by 0.3 per cent at 7,063.68 points, but gains were tempered by the likes of Barclays, which fell 1.75p to 227p, and Lloyds Banking Group, which dropped 0.28p to 64p.

Shares in HSS Hire fell 1p to 83p after the tool supplier, which was forced to issue a profit warning last month, said it would raise £13 million through a share sale to boost its balance sheet and fund investment. The firm is undergoing a transformation programme that will see the integration of a new national distribution and engineering centre.

The biggest risers on the FTSE 100 included DCC, up 210p at 6,070p, Fresnillo, up 31p at 1,124p, and Paddy Power Betfair, up 220p at 8,735p. The biggest fallers included BHP Billiton, down 21p at 1,270.5p, and Rio Tinto, down 30.5p at 3,081p. The car seller and distributor revved up with news of its £234 million strategic and “compelling” acquisition of a South American distribution firm. Losses at the Indian online fashion retailer increased in the first half as it continued to increase spend on marketing and technology.