FTSE closes down as the pound falls to two-month low

FTSE closes down as the pound falls to two-month low thumbnail

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The FTSE 100 treaded water on Tuesday as sterling hit its lowest point against the dollar in two months.

The index of London’s top companies ended the day down 10.31 points at 7,919.48 – a reduction of 0.1%.

It came as steep falls for some of the country’s miners – including Fresnillo, which dropped 6.8% – were offset by some of the biggest financial institutions.

Meanwhile, Jerome Powell, boss of the US Federal Reserve, hinted that the Fed might raise interest rates further and faster than thought.

It helped push the dollar up against the pound and other major international currencies. Shortly after markets closed in Europe one pound could buy 1.186 dollars, a reduction of 1.3%.

“Its gloomy forecast for the year ahead had hit Fresnillo hard already, but the post-Powell dollar surge and accompanying slump in precious metals added to the woe,” said Chris Beauchamp, chief market analyst at online trading platform IG.

“Most of the gains from last year have now gone, and with the dividend cut too the shine has really come off the shares for the time being.

“Should the dollar bounce go further from here then we can expect more losses for the shares.”

In Europe the Dax index closed down 0.6% while the Cac 40 dropped 0.5%. Shares in the Dow Jones on Wall Street dropped by 1% while the S&P 500 was down 0.8% shortly after European markets had closed.

In company news, Greggs shares dipped despite the high street baker chain posting higher sales and confirming plans to open a raft of new sites.

The company, which has nearly 2,330 shops, said total sales hit a record £1.5 billion last year, up by nearly a quarter on the previous year.

Shares in the business closed down 1.4%.

Elsewhere, Wood Group gained again as the engineering business received a fourth takeover offer from private equity firm Apollo.

Wood told investors it may reject the roughly £1.6 billion takeover move, helping its shares lift 12.8%.

Estate agency group Foxtons closed higher after it cashed in on soaring rental prices, although the firm cautioned over a more challenging year ahead as higher interest rates are set to rein in housing sales.

It was up 2.2% at the end of Tuesday’s session.

Online fashion firm In The Style saw its calamitous stock market listing brought an end on Tuesday after agreeing to a £1.2 million sale to avoid insolvency.

The retailer saw shares dive 78.6% after the sale, which came around two years after its £105 million London float.

The biggest risers in the FTSE 100 were Melrose Industries, up 6.05p at 162.95p, Ashtead Group, up 128p at 5,874p, Beazley, up 12.5p at 623p, Flutter Entertainment, up 275p at 14,250p, and Rentokil, up 8.6p at 520p.

The biggest fallers were Fresnillo, down 52p at 708.4p, Ocado Group, down 24.8p at 505p, Glencore, down 23p at 479.5p, Endeavour Mining, down 58p at 1,685p, and Antofagasta, down 47.5p at 1,591p.