FTSE 100 drops below 7,300 points for first time in five months as pound grows
The FTSE 100 has dropped below 7,300 points for the first time in nearly five months as the pound continued to grow and global uncertainty caused investors to halt activity.
The index dropped to a low of 7,227 points this afternoon before gaining slightly towards 7,270.
Markets across Europe have all fallen today but the FTSE has led the charge lower as sterling climbed following positive comments from Michel Barnier, the EU's chief negotiator, on Brexit.
Read more: Sterling rises as Barnier sounds positive notes on Brexit
The stronger pound – close to $1.30 – impacts the foreign earnings of international companies as they become worth less once converted.
A stronger than expected US jobs report with average hourly earning rising 0.4 per cent also contributed to the FTSE lows.
The biggest fallers have been miners Antofagasta and Fresnillo, down 3.3 per cent and 2.9 per cent respectively, closely followed by grocer Ocado, down 2.7 per cent.
Spreadex analyst Connor Campbell said the FTSE was “easily the day's worst performer” because of Barnier's “encouraging mood” over the Brexit deal.
Russ Mould, investment director at AJ Bell, said: “The FTSE 100 is on track for one of its worst weeks this year.
Read more: FTSE 100 trades at five-month low as emerging markets continue to fall
“The banking sector remains one of the worst offenders with investors clearly worried about the state of the UK economy."
He added: “Key fallers on Friday included Royal Bank of Scotland (RBS) whose shares are now down by 11 per cent this year, more than twice the decline in the FTSE 100 (4.8 per cent).”
RBS only this week announced the closure of 54 more branches as it seeks to prune its network of high street branches.