The Scotsman

FTSE makes hay as pound fails to shine

- Mar­ket re­port Emma Newlands Business · Currencies · Europe Stock Markets · UK News · Foreign Exchange Market · Financial Markets · Finance · Stocks & Markets · The Financial Times Share Index · United Kingdom · European Union · London · CMC Markets · Reckitt Benckiser · Ashtead · Unilever NV · World Trade Organization · Boris Johnson · Germany · Primark Stores Limited · Europe-Middle East Stock Markets · FTSE 100 · CAC 40 · Dave Madden · Diageo · Diageo · GlaxoSmithKline

News of a po­ten­tial new stum­bling block on the UK’S road to ne­go­ti­at­ing a deal with the Euro­pean Union be­fore the end of the year sent the FTSE 100 soaring in Lon­don.

The FTSE jumped by nearly 2.4 per cent, clos­ing up 138.32 points to 5,937.4, as it ben­e­fited from a weak pound. It had been re­ported on Sun­day that min­is­ters were pre­par­ing a new bill that would over­rule parts of the with­drawal agree­ment that was signed by the UK and the EU.

It sent ster­ling tum­bling by 0.9 per cent against the dollar to $1.3159, and by 0.7 per cent against the euro to €1.1136.

The FTSE is pop­u­lated by many ex­porters whose prod­ucts be­come cheaper for for­eign buy­ers when the pound falls. CMC Mar­kets an­a­lyst David Mad­den said: “The fall in the pound is help­ing the FTSE 100 out­per­form ver­sus its eu­ro­zone equiv­a­lents.

“Firms that have a large in­ter­na­tional pres­ence, such as As­trazeneca, Reckitt Benckiser, Di­a­geo, Ashtead, Unilever, and Glaxo - Smithk­line, are all ben­e­fit­ing from the drop in the pound. Ster­ling is un­der pres­sure over fears the UK and the EU might not strike a deal, and that would re­sult in busi­ness be­ing con­ducted on World Trade Or­ga­ni­za­tion (WTO) terms in Jan­uary.

“Yes­ter­day, Prime Min­is­ter [Boris] John­son said that if a free trade deal has not been agreed upon by 15 Oc­to­ber, it would be time to walk away from the trade talks and pe­ruse a ba­sic Wto-style trad­ing re­la­tion­ship with the EU, which would com­mence in 2021.”

Other Euro­pean mar­kets also had a strong day with the Dax in Ger­many up 2 per cent, and the Cac 40 ris­ing 1.8 per cent.

US mar­kets were closed for La­bor Day, so re­mained un­changed.

In com­pany news, shares in me­dia com­pany Fu­ture closed up by more than 18 per cent at 1,722p after it re­vealed that a surge in on­line read­ers will boost its profit.

The owner of Four­fourtwo and Techradar now ex­pects full-year profit to be ahead of mar­ket after it saw a 25 per cent jump in unique vis­i­tors in the UK.

Pri­mark- owner AB Fo ods rose 0.5 per cent to 2,038p after say­ing it would top profit fore­casts as sales surged over the sum­mer.

Sales at the clothes shop were “re­as­sur­ing and en­cour­ag­ing” since they re­opened in June, the com­pany said.

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