World Market: FTSE closing in on record high mark as pound plunges

The broader UK stock market got support after sterling plunged to a new 31-year low, before recouping some of its losses.

By: Reuters | London | Published:October 7, 2016 1:51 pm

Britain’s top shares index advanced early on Friday to trade near a record high, with concerns about a further fall in the sterling after a plunge to a 31-year low seen as helping internationally-exposed stocks.

The blue-chip FTSE 100 index was up 0.4 percent at 7,030.30 points by 0712 GMT, less than 100 points away from its life-time high set in April last year. The index is up nearly 2 percent so far this week after falling in the previous week.

The mid-cap FTSE 250 index, dominated by more domestically-focused companies, was up 0.1 percent.

The broader UK stock market got support after sterling plunged to a new 31-year low, before recouping some of its losses, with traders saying that the UK currency remained vulnerable to renewed selling due to fears Britain will pursue a so-called “hard” exit from the European Union.

The FTSE 100’s international firms earn much of their revenues in U.S. dollars, and a weaker pound helps exporters as well. But the slump in sterling has also impacted the dollar value of FTSE 100 stocks, a potential negative for overseas investors for whom the dollar is the benchmark currency.

Diversified global miners were in demand, with the UK mining index rising more than 2 percent. Shares in Anglo American, Rio Tinto and BHP Billiton rose 1.8 to 3.3 percent.

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