FTSE 100 goes in reverse as sterling strengthened while Covid restrictions increased
The FTSE 100 slipped 0.4 per cent lower in afternoon trading today, by fears over coronavirus and new restrictions.
London’s main stock index fell 0.4 per cent at 5,898 points. The FTSE 250 was 0.1 per cent higher.
Read more: China’s economy grew 4.9 per cent in third quarter
Rolls-Royce and Rentokil were the largest drags on the FTSE 100.
The FTSE 250 index, considered a barometer for Brexit sentiment, closed 0.2 per cent up, boosted by shares of flexible office space provider IWG which jumped five per cent after Berenberg upgraded the stock to “buy.”
Meanwhile, European stock exchange operator Euronext said trading would resume after it fixed a glitch that froze all transactions in Amsterdam, Brussels, Lisbon and Paris for more than three hours.
FTSE 100 shrugs off China growth miss
Overnight in Asia, China’s SSE composite index fell 0.7 per cent after economic data slightly undershot expectations.
China’s economy grew 4.9 per cent in the third quarter compared to a year earlier, official data showed. That was after 3.2 per cent growth in the second quarter.
The figure was lower than the 5.2 per cent forecast by economists, however. Nonetheless, the reaction markets was muted, with the IMF expecting China to be the only economy that grows in 2020.
Pound weighs but domestic stocks rise
The pound climbed 0.7 per cent against the dollar to $1.30. Investors expect talks between the UK and EU over a post-Brexit trade deal to resume after only a short delay.
Cabinet Office minister Michael Gove said this weekend that the door was still “ajar” for talks. Reports said EU officials expect discussions to resume soon.
Lee Hardman, currency analyst at MUFG, said: “Market participants continue to believe that a trade deal will be reached.”
A higher pound weighs on the FTSE, however, as it makes the overseas earnings of multinational companies worth less in relative terms.
Read more: Boris Johnson urges businesses to speed up Brexit preparations
Domestically focused stocks fared the best during the session. Retailer Next rose along with online supermarket Ocado.
Property companies British Land, Land Securities and Rightmove also climbed as house prices continued their ascent.