Footsie loses its fizz while pound rallies
Market report Scott Reid
London’s benchmark FTSE 100 Index lost ground while the pound touched a five-week high as investors deserted the dollar during President Donald Trump’s first days in office.
Sterling rose 1 per cent against the dollar to $1.248, its highest level since 16 December. That helped drive the Footsie lower by 47.26 points or 0.7 per cent to close at 7,151.18.
Michael Hewson, chief market analyst at CMC Markets UK, said: “It’s been a disappointing start to the week across the board as European investors take a risk off position after Friday’s ‘America First’ President Trump inauguration speech on Friday.”
Investors were also digesting the UK government’s industrial investment plans which included a £556 million boost for the so-called “northern powerhouse”, an overhaul of technical education and £170m cash for a new emphasis on science, technology, engineering and innovation. Across Europe, the French Cac 40 and German Dax closed lower by about 0.6 per cent and 0.7 per cent respectively.
In UK stocks, Paddy Power Betfair shares plunged 380p to 8,295p after Trump’s shock election victory and unfavourable sporting results dented takings to the tune of £40m in the fourth quarter.
Bovis Homes Group was one of the biggest risers on the FTSE 250 following reports that one of the company’s biggest shareholders, Schroder Investment Management, has been pushing the company to merge with its rival Berkeley Group Holdings. Bovis shares jumped 23.5p to 820.5p while Berkeley rose 42p to 2,829p. Miners made some useful gains as investors opted for safe haven assets including precious metals in the wake of Donald Trump’s inauguration. Mr Trump’s election victory and unfavourable sporting results dented takings at bookmaker Paddy Power Betfair to the tune of £40m in the quarter.