MARKET REPORT

BLUE-CHIP stocks pushed the London market back above the 7,500 mark yesterday as the pound slumped in response to the strong US dollar.

The FTSE 100 Index closed up 36.94 points to 7,511.71, with Royal Bank of Scotland (RBS) sitting among the biggest risers after reporting a half-year profit for the first time since 2014. Shares in RBS closed nearly 2% higher, up 5p to 261.2p, after the state-backed bank recorded a £939m profit for the six months to June 30, which compares with a £2bn loss in the same period last year.

RBS also revealed that it has begun contingency planning for Brexit by engaging with the Dutch central bank to use its existing banking licence in the Netherlands, which will see the lender employ 150 staff in Amsterdam.

Meanwhile, London’s premier index was also enjoying a leg-up as some multinational stocks benefited from sterling’s weakness. Top-flight stocks, which report in US dollars or euros, get a boost on the FTSE 100 Index when the pound falls because their earnings benefit from a more favourable currency translation.

Sterling was down 0.7% versus the US dollar at 1.303 after the greenback soared following a bright update on the US jobs market. American employers added 209,000 jobs in July, a second straight month of robust gains.

Against the euro, the pound was up 0.3% to 1.10.

Neil Wilson, senior market analyst at ETX Capital, said the market reaction to the US jobs report was “a lot of fuss over nothing”.

He said: “We’ve just seen wild gyrations in the market to a report that was pretty much as expected. The dollar jumped as the report was a little ahead of expectations but there is absolutely nothing in this that changes the dial on the Fed or inflation.”

On the oil markets, the price of Brent crude lifted 0.6% to $52.30 a barrel.

In UK stocks, Alton Towersowner Merlin Entertainments was in the ascendancy after confirming it was on track to hit full-year targets. Shares were up 5%, or 26.6p to 489.4p.

The other big risers on the FTSE 100 Index were Mediclinic International, up 29.5p to 756p, Smurfit Kappa, up 62p to 2,279p, and Royal Bank of Scotland, up 5p to 261.2p.

The biggest fallers were Barratt Developments, down 29p to 589p, Persimmon, down 102p to 2,464p, Taylor Wimpey, down 7.3p to 187.9p, and Fresnillo, down 52p to 1,457p.