FTSE slumps but Saga has sunny session

The FTSE 100 slumped to a three-month low after it was dragged down by the pound’s recent rally.

London’s top flight closed 101.52 points lower at 5,862.05. David Madden, market analyst at CMC Markets UK, said: “The FTSE 100 is to finish deep in the red as a mixture of a firmer pound and a poor performance from banking and energy stocks has hurt the index. Diageo, Glaxosmithkline, AstraZeneca, Ashtead and Unilever all derive a large portion of their revenue from overseas, so the push higher in the pound usually hits the stocks.”

Sterling continued its recent purple patch to hit its highest mark against the dollar since December as a result of strong UK manufacturing figures and weakness in the

US greenback. The pound rose 0.54 per cent versus the US dollar at $1.341 and was up 0.15 per cent against the euro at €1.123.

Mining and commodity firms dominated the risers after well-received manufacturing data from China helped to lift metal prices.

Marks & Spencer shares closed down 4.75p to 106.35p on its first day of grocer y deliveries after linking up with Ocado, as it was marred by technical issues.

Meanwhile, shares in Saga surged 32 per cent to 18p after the company confirmed rep or ts that its former boss was returning, and bringing a £100 million investment to boot. It comes after it emerged over the weekend that the insurance and travel company, which has typically aimed at the over-50s market, would be reunited with its former chief executive, chairman and owner Sir Roger De Haan in the role of non-executive chair. He will also be pouring £100m into the firm, in a bid to stabilise its finances, as part of a £150m equity raise.

William Ryder, equity analyst at Hargreaves Lansdown, noted: “It’s not surprising Saga is looking for new money. In some ways, it would be hard to design a company more susceptible to a pandemic than the group’s travel operations – and Saga didn’t start the year in the best of health either.

“The new money will dilute current shareholders, but we doubt there are too many long-term investors left. The shares have fallen heavily over the last few years, and the pandemic only threatened to administer the coup de grace.”