Pound’s rise takes toll on stock market
Market report Perry Gourley
Sterling surged to a fresh one-year high against the US dollar while blue-chip stocks slumped afterthebankofenglandhintedthatitmayhike interest rates in the “coming months”.
The stronger pound took its toll on the FTSE 100 index, which closed down 84.31 points to 7,295.39.
David Madden, market analyst at CMC Markets, also said London’s top flight was under pressure from a commodity stocks drop in response to lacklustre economic data from China.
“The retail sales, industrial production and fixed asset investment figures all came in below economists’ expectations and grew at a slower pace than the previous reading,” he said.
Next was in the ascendancy after the group upped its earnings outlook after “encouraging” trading. Chief executive Lord Wolfson said the impact of the Brexit vote on the pound “doesn’t look like it’s fuelling an inflationary spiral and is “passing right through”. Shares soared 13 per cent, up 577p to 4,994p.
Sky drifted lower after UK culture secretary Karen Bradley confirmed 21st Century Fox’s £11.7 billion takeover bid for the broadcaster would be referred to the competition watchdog for an in-depth probe.
21st Century Fox is controlled by the Murdoch family – Rupert and his sons Lachlan and James – and is attempting to seize control of the 61 per cent of Sky it does not already own. Shares were down 3.5p to 928.5p.
The biggest risers on the FTSE 100 index incldued GKN, up 10.3p to 337.5p, and Lloyds Banking Group, up 1.4p to 66.4p. The clothes and furniture retailer was in demand after it upgraded its sales and profit guidance for the full year in a positive market update. Shares in the support services and construction firm fell sharply after it warned over profits due to the impact of poor trading and rising costs.