FTSE 100 watch: Footsie down as pound rebounds

on Oct 12, 2016

The UK benchmark index dipped into the red today as the pound rebounded on Brexit-related developments. As of 15:02 BST, the FTSE 100 had declined 0.37 percent to stand at 7,043.77 points, retreating from a record high of 7,129.83 points reached yesterday.

Sterling regained ground after Prime Minister Theresa May caved into pressure to allow Tory MPs to vote for a Labour motion calling for greater scrutiny of her proposals in Britain’s exit from the European Union. However, she ruled out letting parliament vote on whether to trigger Article 50, the formal Brexit procedure.
May’s turnaround on her stance “could potentially limit the prospect of a ‘hard Brexit’ taking the UK out of the single market, which has been a major concern for some investors and the business community in recent days,” said Kathleen Brooks, research director at City Index.

Meanwhile, investors were looking ahead to the Federal Reserve’s minutes on its last meeting in September when policymakers decided against an interest rate hike increase but said they expected at least one hike by the end of the year. The minutes, due out at 19:00 BST, are set to reveal an unusual division in the rate-setting committee.
In individual movers, easyJet (LON:EZJ) rose today after the budget airline priced the issue of €500 million bonds maturing in October 2023 at a coupon of 1.125 percent. British Airways and Iberia owner International Consolidated Airlines Group (LON:IAG) also gained ground today.
At the other end of the spectrum has been Lloyds Banking Group (LON:LLOY), whose shares declined after the group announced plans to axe 1,230 jobs as as part of its three-year strategy. Peers Royal Bank of Scotland (LON:RBS) and Standard Chartered (LON:STAN) were also in the red.

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