The UK benchmark index has slipped deep into the red in the last trading day of the week, pressured by the crash in the Turkish lira, as well as by the latest US sanctions on Russia. Rolls-Royce Holdings (LON:RR) is underperforming the FTSE 100 index following a downgrade at JPMorgan.
FTSE 100 loses ground
As of 12:23 BST, Britain’s blue-chip index had given up 49.08 points to stand 0.63 percent lower at 7,692.69. Sentiment has been subdued today as the Turkish lira plunged to record lows, while the rouble remains under pressure following US sanctions against Russia over the poisoning of former Russian spy Sergei Skripal.
“Risk aversion is taking control again, putting pressure on emerging market currencies while letting the safe haven dollar and the Swiss franc appreciate,” said Antje Praefcke, a currency strategist at Commerzbank in Frankfurt, as quoted by The Times.
Individual Footsie movers
In individual stock news, shares in Rolls-Royce have been sold off as JPMorgan lowered its rating on the British engine maker to ‘underweight’.
“Relative to other civil aerospace stocks we follow, we think Rolls-Royce now offers investors a less attractive risk-reward,” the analysts wrote, as quoted by Reuters, arguing the company was showing deteriorating earnings quality. Rolls-Royce’s share price is three percent worse off at 1,051.50p.
Johnny Walker and Smirnoff owner Diageo (LON:DGE) meanwhile is outperforming the broader market as it unveiled the start of its share buyback programme which will see the company return up to £2 billion to shareholders during the year ending June 30, 2019. The group’s shares are currently changing hands 0.21 percent higher at 2,803.50p.
The FTSE 100 was 0.71 percent lower at 7,686.77 points as of 12:50 BST on Friday, 10 August 2018.