MARKET REPORT

THE pound strengthened yesterday as investors counted on the Prime Minister surviving a no-confidence vote brought against her leadership.

Sterling was up 1.4% against the US dollar at 1.266 and rose 1% versus the euro to 1.114 at the London market close.

Fiona Cincotta, senior market analyst at City Index, said: “Currency markets were surprisingly buoyant in the wake of the no-confidence vote against Theresa May announced this morning, increasingly betting that the Prime Minister may be able to withstand the political pressure from her party and remain the leader of her party.”

Meanwhile, London’s blue-chip index closed higher as investors were optimistic about US-China relations.

The FTSE 100 closed up 73.25 points, or 1.08%, at 6,880.19.

In corporate news, engine maker Rolls-Royce confirmed it is pressing ahead with plans to shift design approval for large aero engines from Derby to Germany amid Brexit worries.

The group said it was in talks with the European Safety Aviation Agency over the move, which comes as part of Brexit contingency planning that has also seen Rolls begin stockpiling parts in preparation.

In its trading update, Rolls also said 2018 earnings would be in the upper half of its guidance for group operating profit of around £400m, plus or minus £100m, after airlines flew their planes for more hours, boosting demand for maintenance.

Rolls-Royce shares closed 35.20p up to 816p.

Shares in Superdry plunged after the clothing brand warned that its annual performance will be weaker than previously expected.

Underlying profit before tax fell 49% to £12.9m in the 26 weeks to October 27.

It comes amid a boardroom bustup between the current management and Superdry’s co-founder, Julian Dunkerton, who is trying to stage a comeback at the company.

Superdry shares fell 218.30p to 355.2p.

A barrel of Brent crude was trading up 1.13% at 61.13 US dollars (£48.30).

Germany’s DAX rose 1.38% and France’s CAC 40 grew 2.15%.