The FTSE 100 has started the new week on the back foot responding, to a rise in the pound. Falls in Associated British Foods (LON:ABF) and Lloyds Banking Group (LON:LLOY) are also weighing on the blue-chip index, with investors reacting negatively to company updates.
FTSE 100 falls into the red
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As of 12:25 BST, the Footsie had given up 40.54 points to stand 0.56 percent lower at 7,241.80. Sentiment has been subdued this Monday, with the pound rising as it emerged that the country’s trade deficit had narrowed in the three months to July.
“British firms appear to be depleting the inventories they accumulated before the original Brexit deadline in March, rather than placing new orders with overseas suppliers,” Samuel Tombs, chief UK economist at Pantheon Macroeconomics, commented, as quoted by Proactive Investors. “A rebuild of stocks before the October deadline likely will drive up both imports and the trade deficit again soon.”
Individual Footsie movers
In individual Footsie movers, shares in AB Foods have come under pressure even as the Primark owner reiterated its earnings per share forecast for the full year. The company, however, noted that strong performance at its Primark chain is likely to be partly offset by downbeat results at its Sugar business. AB Foods’ shares are 1.87 percent down at 2,310.00p.
Lloyds meanwhile has recovered some of the losses posted in earlier trade, trading about 0.21 percent lower. The group’s shares fell sharply earlier in the session when the company increased its provision over the payment protection insurance scandal and suspended its buyback programme.
“Investors may also worry about the dividend, however we do know that the later the claims, the less chance they have of success,” Markets.com analyst Neil Wilson said, as quoted by Reuters.
British Airways parent IAG (LON:IAG) is about 1.8 percent down amid a pilot strike at the British flag carrier.
The FTSE 100 was 0.62 percent down at 7,237.21 points as of 13:03 BST on Monday, 09 September 2019.