Weak US data sees Footsie losing ground

Market report Perry Gourley

Sterling surged to nine-week highs against the dollar after the greenback was hit by unexpectedly poor US economic data.

The pound rose rose as high as $1.344 against the US currency after fresh data showed that the American service sector grew at its slowest pace since 2010.

The US numbers contrast with UK data released on Monday, which showed the services sector swinging back to growth in August after a contraction in July. The US data weighed on global stocks including the FTSE 100, which closed off 53.3 points at 6,826.05.

Tony Cross at Trustnet Direct said a resurgent pound had taken the edge off recent gains. “In the wake of the referendum there was a wave of speculation that overseas buyers would move in to snap up UK stocks which looked like veritable bargains given the shake down we saw with the currency, but with signs of confidence returning to the country’s economy and a belief that we may be able to dodge a recession, the landscape has changed.” NEW YORK: Wall Street closed sharply ahead last night led by gains in energy companies after Spectra Energy agreed to be acquired by the Canadian company Enbridge for about $28 billion.

The Dow Jones Industrial Average rose 46.16 points, or 0.25 per cent, to end on 18,538.12 while the broader Standard & Poor’s 500 Index finished ahead 6.50 points, or 0.30 per cent, at 2,186.48. The Nasdaq Composite Index closed on 5,275.91, up 26.01 points or 0.50 per cent. The fuel cell company announced it is to launch a trial of its prototype home power system in partnership with utility firm Centrica. Shares in the self-invested personal pensions provider fell sharply despite it reporting higher revenues and profits at the interim stage.