FTSE 100 close: Tumbling pound boosts London index as Ocado slides

London’s FTSE 100 sprang higher today, aided by the pound clocking a dreadful day.

The capital’s premier index jumped 0.52 per cent to 7,500.50 points, while the domestically-focused mid-cap FTSE 250 index, which is more aligned with the health of the UK economy, leapt 1.98 per cent to 18,412.81 points.

Early advances in the City were driven by a bumper trading day across the pond amplifying investors’ risk appetite.

Wall Street’s top three indexes all clocked steep rises by the close last night. The S&P 500 added 1.15 per cent, while the Dow Jones gained 0.63 per cent. The tech-heavy Nasdaq soared 1.65 per cent, meaning it has now scaled nearly 30 per cent higher since the start of the year.

They opened broadly flat today.

Better than feared US data has signalled the world’s largest economy may avoid a recession despite the Federal Reserve hiking interest rates aggressively, known as a “soft-landing”.

“This is being taken as good news, even though past indications of strength had the propensity to be read as a bad omen for ever higher rate hikes,” Susannah Streeter, head of money and markets at Hargreaves Lansdown, said.

Those early advances in the City were amplified by pound sterling tumbling nearly one per cent against the US dollar, likely due to Fed chair Jerome Powell at the European Central Bank’s monetary policy conference in Sintra, Portugal signalling more rate rises are coming.

Bank of England governor Andrew Bailey, on the same panel as Powell, also hinted the central bank isn’t done with tightening policy.

The FTSE 100 often rises when the pound weakens due a large chunk of the index being made up of firms who generate their income overseas. When sterling falls, it means these companies can exchange their foreign earnings into a larger amount of UK currency.

High street fashion retailer JD Sports closed near the summit of the FTSE 100, climbing just over one per cent, retracing some of yesterday’s sharp losses.

The trainer-specialist yesterday said profits are on track to reach £1bn, but warned of a slowdown in its US business. 

Accountancy software group Sage was the best performer on the premier index, soaring more than five per cent after analysts upgraded their judgement of the firm.

Online supermarket and middle class favourite Ocado was the biggest faller on the FTSE 100, shedding a shade over five per cent after Amazon appeared to rule out a bid for the company.

Oil prices surged around two per cent.