FTSE reaches record high as sterling drops

Market report Emma Newlands

The FTSE 100 closed at a record high of 7,556.24 points thanks in part to a drop in sterling sparked by concerns about the state of Brexit negotiations.

Sterling fell nearly 0.4 per cent to $1.316 against the US dollar and 0.2 per cent versus the euro to trade at €1.112.

David Madden, a market analyst at CMC Markets UK, said the FTSE 100’s record high was primarily due to the pound’s declines.

“The bullish move was achieved for the wrong reasons, as the dip in the pound on the back of the stalled Brexit talks helped the British index,” he said.

Laith Khalaf, senior analyst at Hargreaves Lansdown, noted that the index’s previous high of 7,547.63 was reached on 26 May.

He said: “The UK stock market continues its winning streak despite concerns over economic performance and the unfolding Brexit process. The question is whether the market’s strong run means it’s fit to burst.”

However, he also said there is some cause for optimism. “The global economy, driven by its largest contributor the US, is picking up, with even Europe seeing a renaissance. Interest rates remain low and the UK consumer remains resilient. Meanwhile, in an environment where doom and gloom pervades market sentiment, any positive surprises could go a long way to boosting stock prices.

“For long-term investors the immediate direction of the stock market is of limited importance in any case, as what ultimately determines your wealth are the scores on the doors when you come to draw on your investment.” The online food delivery business rose on news that its Hungryhouse takeover has been provisionally cleared by the competition watchdog. The industrial chains company warned over profits for the full year to March and said trading was “mixed” in the six months to September.