FTSE up as pound hits near four-year high

Independent

2 days ago

Miners and defence stocks helped support the FTSE 100 on Thursday, shaking off a stronger pound, which serves as a headwind for the international earner-heavy index.
The pound spiked to its best level against the dollar since October 2021. The dollar fell on reports that US President Donald Trump is looking at naming a new Federal Reserve chief.
Weaker US data also did little for the dollar.
The FTSE 100 index rose 16.85 points, 0.2%, at 8,735.60. The FTSE 250 added 176.62 points, 0.8%, at 21,474.66, and the AIM All-Share climbed 6.59 points, 0.9%, at 767.04.
In European equities on Thursday, the CAC 40 in Paris ended flat, while the DAX 40 in Frankfurt added 0.6%.
The pound was quoted higher at 1.3733 dollars at late on Thursday afternoon in London, compared to 1.3622 dollars at the equities close on Wednesday. The euro stood at 1.1698 dollars, higher against 1.1626 dollars. Against the yen, the dollar was trading at 144.48 yen, lower compared to 145.60 yen.
The single currency had hit an intraday high of 1.1744 dollars, its best level since September 2021, while sterling had bought 1.3764 dollars, its loftiest level since October 2021.
The Wall Street Journal reported on Wednesday that Mr Trump is considering naming a new chair of the Fed as early as September or October, undermining Jerome Powell, whose term has another 11 months to run.
Citing 'people familiar' with the matter, the newspaper said Mr Trump's impatience with the US central bank's slow approach to cutting interest rates has prompted him to consider accelerating his announcement of a successor as Fed chair.
Under consideration as replacements, according to the WSJ, are Treasury Secretary Scott Bessent, economic adviser Kevin Hassett, and former Fed governor Kevin Warsh, with Mr Trump evaluating each's commitment to cutting interest rates.
The news knocked the dollar, sending the euro and sterling to multi-year highs against it.
The Bureau of Economic Analysis said the US economy shrunk 0.5% on an annualised quarter-on-quarter rate in the first three months of the year. The second estimate had put the decline at 0.2%.
On Friday, BEA will release personal consumption expenditure data for May, including core year-on-year PCE data, which is the key inflationary gauge for the Federal Reserve.
The yield on the US 10-year Treasury was quoted at 4.28%, narrowing from 4.32% a day earlier. The yield on the US 30-year Treasury was quoted at 4.84%, narrowing from 4.86%.
In New York, the Dow Jones Industrial Average was up 0.7%, the S&P 500 and Nasdaq Composite each added 0.6%.
Brent oil was quoted lower at 67.83 dollars a barrel late on Thursday afternoon in London, down from 68.18 dollars on Wednesday. Gold was lower at 3,322.21 dollars an ounce against 3,323.77 dollars.
In London, miners shone on the FTSE 100. Anglo American surged 6.9%, Antofagasta added 6.0% and Glencore perked up 5.5%.
Defence stocks were also higher, with BAE Systems up 3.8%.
3i Group climbed 4.8%. It said Action continued to perform 'strongly', with like-for-like sales growth of 6.9% in the year to date and net new store openings of 111 on track with expansion plans.
Action's product assortment includes decoration, DIY, garden and outdoor, household goods, multimedia, health, stationery and hobby, toys and entertainment, food and drink, laundry and cleaning, personal care, pet, fashion and linen.
'The like-for-like performance continues to be transaction driven with a strong contribution from seasonal sales,' 3i said.
BP rose 1.3%, while Shell added 0.5%. Shell formally denied a press report that it is in talks to buy rival oil major BP.
'In response to recent media speculation Shell wishes to clarify that it has not been actively considering making an offer for BP and confirms it has not made an approach to, and no talks have taken place with, BP with regards to a possible offer,' the London-based energy company said in a statement.
'Shell confirms it has no intention of making an offer for BP,' the company added.
Volex climbed 18%. It reported increased earnings for the 2025 financial year and raised its dividend in an 'outstanding year'.
The manufacturer of critical power and data transmission products said revenue was up 19% at 1.09 billion dollars in the 12 months to the end of March from 912.8 million dollars a year ago.
Pretax profit climbed 25% to 64.3 million dollars from 51.6 million dollars, while operating profit was up 30% to 82.9 million dollars from 63.9 million dollars.
Next 15 slumped 28%. The stock is down around three-quarters over the past 12 months. It warned that profit for the current financial year will fall materially short of expectations, citing a weaker dollar, rising investment costs, and pipeline conversion issues at its innovation business Mach49.
The London-based business growth consultant said more than half of its revenue is dollar-denominated, exposing it to adverse foreign exchange movements.
The biggest risers on the FTSE 100 were Anglo American, up 138.0p at 2,143.5p, Antofagasta, up 104.0p at 1,830.0p, Glencore, up 14.9p at 288.2p, Entain, up 44.8p at 900p, and 3i Group, up 189.0p at 4,138.0p.
The biggest fallers on the FTSE 100 were Unilever, down 114.0p at 4,388.0p, British American Tobacco, down 74.0p at 3,443.0p, Hikma, down 37.0p at 1,999.0p, HSBC, down 14.5p at 875.5p, and Haleon, down 5.8p at 377.6p.
Friday's economic calendar has the US PCE data at 13:30 BST, after eurozone consumer confidence data at 10:00 BST.