Sterling gains at expense of Footsie index

Market report Emma Newlands

The pound started to recover, rising on the back of surprisingly high inflation data and hopes that Theresa May’s government would strike a successful deal with the Democratic Unionist Party.

Sterling rose 0.5 per cent to trade at $1.273 against the US dollar, having fallen to eightweek lows a day earlier amid political jitters in the wake of last week’s inconclusive election. Versus the euro, the pound rose 0.6 per cent to trade at €1.137.

But the stronger pound weighed on the FTSE 100, which ended the day down 11.43 points at 7,500.44. Investors were reacting to higherthan-expected inflation figures, as well as signs that May was close to reaching a “confidence and supply” deal with Northern Ireland’s DUP.

In UK stocks, Capita shares surged 83.5p to 634p after the outsourcing firm, which sent out profit alerts twice in three months last year, said it was making progress with a turnaround plan and was exploring a partnership with British Airways.

Ted Baker shares rose 45p to 2,470p as group revenue rose 14.2 per cent in the 19 weeks to 10 June, while retail sales grew 8.4 per cent on a constant currency basis.

Shares in construction equipment firm Ashtead dropped 41p at 1,600p despite posting an 8 per cent rise in pre-tax profits to £765.1 million for the year to 30 April.

The biggest risers on the FTSE 100 included London Stock Exchange, up 183p to 3,582p, and Convatec Group, up 9.5p to 324p. The biggest fallers included 3I Group, down 27.5p at 901p, and Centrica, down 3.6p at 197p. Shares in the pub group grew after it said better-thanexpected recent sales were set to lead to slightly improved trading for the 12 months ending 30 July. Recent terror attacks in the UK dragged the owner of sites like Madame Tussauds and the London Eye, where it logged fewer visitors.