Strong pound and US market weakness drags FTSE 100 lower
The FTSE 100 finished the day down 14.56 points, or 0.19%, at 7,558.49.
Your support helps us to tell the story
From reproductive rights to climate change to Big Tech, The Independent is on the ground when the story is developing. Whether it's investigating the financials of Elon Musk's pro-Trump PAC or producing our latest documentary, 'The A Word', which shines a light on the American women fighting for reproductive rights, we know how important it is to parse out the facts from the messaging.
At such a critical moment in US history, we need reporters on the ground. Your donation allows us to keep sending journalists to speak to both sides of the story.
The Independent is trusted by Americans across the entire political spectrum. And unlike many other quality news outlets, we choose not to lock Americans out of our reporting and analysis with paywalls. We believe quality journalism should be available to everyone, paid for by those who can afford it.
Your support makes all the difference.London’s top index handed back some of its recent gains after oil stocks, a resurgent pound and a weak opening for US markets weighed on sentiment.
Fed chairman Jerome Powell’s comments on the potential for a dialling down of the pace of rate hikes supported trading at the start of play but positivity faded later in the day.
The FTSE 100 finished the day down 14.56 points, or 0.19%, at 7,558.49.
Sterling was buoyed by a knock to the dollar following Mr Powell’s comments, which impacted currency-sensitive stocks such as Shell and BP.
The pound was up 1.62% against the dollar at 1.225 and was 0.68% higher against the euro at 1.166 at the close.
Joshua Mahoney, senior market analyst at IG, said: “A resurgent pound served to limit any FTSE 100 upside today, with early European optimism fading into the close.
“Wednesday’s comments from Powell over the willingness to slow the pace of tightening has helped boost risk assets, to the detriment of the dollar.
“Financial stocks have particularly felt the pressure, with expectations of a slower and lower approach from the Fed serving to limit margin expectations for banks.”
The main US markets drifted on Thursday despite inflation figures showing a moderation in October.
Meanwhile, the other major European indexes were slightly higher at the close despite pulling back later in the session due to the knock-on from trading sentiment in the US.
The Dax improved 0.65% by the end of the session and the French Cac finished 0.23% higher.
In company news, City broker Peel Hunt saw shares slide as half-year profits crashed to just £100,000 due to a dearth of deals and flotations on the London market and as economic woes hammered investor confidence.
The group reported pre-tax profits tumbling 99.7% from £29.5 million a year earlier, with revenues down 42.4% to £41.1 million in the six months to September 30.
Shares were down 4.5p at 78.5p at the close as a result.
Elsewhere, Next edged lower after it bought fashion rival Joules out of administration in a deal alongside the firm’s founder, Tom Joule.
Next said it will own 74% of the troubled brand in a move which will secure the future of around 100 shops and 1,450 workers.
It saw shares move 26p lower to 5,814p.
UK media firm DigitalBox made gains after purchasing the business and assets of satirical website The Poke for an undisclosed sum.
DigitalBox shares improved by 0.5p to 9.25p after it bought the business to “strengthen its position in the satire-comedy space”.
The price of oil moved higher as it was boosted by the weaker dollar and hopes that the Chinese Government will avoid a slump in demand by slowing the easing of Covid restrictions.
Brent crude oil increased by 1.29% to 88.09 US dollars per barrel when the London markets closed.
The biggest risers in the FTSE 100 were Ocado Group, up 42.2p at 664.8p, Intermediate Capital Group, up 74.5p at 1,268p, Schroders, up 21p at 463.4p, Prudential, up 36.6p at 1,016p, and Scottish Mortgage Investment Trust, up 26.8p at 796.4p.
The biggest fallers of the session were Pearson, down 51.6p at 943.6p, Rolls-Royce, down 3.99p at 86.93p, Standard Chartered, down 22.6p at 594.8p, Anglo American, down 106p at 3,301.5p, and Shell, down 62p at 2,382p.