Pound jumps on vaccine news but pushes FTSE down

POSITIVE news that the UK Government aims to vaccine all under 50s by May did enough to push the pound up as markets closed on Friday.

But the strong pound and underwhelming jobs data from the US failed to liven up the FTSE 100, with the internationally focused index closing the day down 14.39 points, or 0.22 per cent, at 6503.72.

By comparison, the FTSE 250 index of more Ukfocused firms enjoyed a solid boost, up 1.24 per cent, as traders hoped the news could see an end to lockdown restrictions and economic recovery over the horizon.

The pound was up 0.32 per cent against the dollar as markets closed at 1.372. It fell 0.29 per cent against the euro to 1.1395.

Typically when the pound is strong against the dollar, the FTSE 100 falls as the value of shares to dollar-denominated investors look more expensive.

But the market can also face a knock if US economic data appears uninspiring, as was the case on Friday with the latest US non-farm payrolls.

David Madden, market analyst at CMC Markets UK, said: “The US non-farm payrolls report was broadly negative as the headline reading showed that 49,000 jobs were added last month, just below the Reuters consensus estimate of 50,000, while Bloomberg’s survey was 100,000.’’

He added: “On a yearly basis, average earnings came in at 5.4 per cent, unchanged on the month as the last report was revised up from 5.1 per cent to 5.4 per cent.

“A high earnings metric could be a sign that a relatively large number of lower income workers have left the labour market.’’

Power generator specialist Aggreko also said it was being eyed up for a takeover, with a consortium made up of Uk-based private equity firm TDR Capital and infrastructure investment manager I Squared Capital US offering 880p a share.

The deal was not ruled out by Aggreko and shares closed the day up 209p, or 33 per cent, at 844p.

The London-listed firm said it expects booking demand to be low until “restrictions are lifted and vaccine deployment is more widespread, both in the UK and our major travel destinations’’. Shares were flat at 355p.

The biggest risers on the FTSE 100 were Whitbread up 160p at 3,280p; Glencore up 11.8p at 259.2p; Natwest up 6.5p at 170.35p; British Land up 16.2p at 458.9p and Pershing Square up 85p at 2,570p.

The biggest fallers on the FTSE 100 were Johnson Matthey down 127p at 2,882p; Experian down 83p at 2,637p; DCC down 166p at 5,700p; National Grid down 20.8p at 851.4p and Aviva down 8p at 341.8p.