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Pound rises, US stocks at new high

London Stock ExchangeThe pound eased back after opening at a one-year high against the US dollar early on Wednesday.

It was fuelled by higher inflation figures which increased the prospect of a rise in interest rates sooner than previously expected.

The pound gained 0.1% against the euro to 1.1113, easing back from a six-week high, and fell 0.51% versus the dollar at 1.3216%, down from its one-year high or 1.3315.

The Bank of England will announce its latest decision on interest rates on Thursday.

Jobs data showed Scotland has the highest employment rate out of any UK nation, with rates growing to a new record high of 75.8% over the last quarter (May to July 2017). There are now over three quarters of people aged 16-64 in employment.

Labour Market Statistics, released today by ONS, show Scotland’s employment rate rose by 1.8 percentage points over the quarter to 75.8%, meaning there are 49,000 more people in work than the previous quarter. This is above the UK rate of 75.3 per cent.

The FTSE100 closed down 0.28% or 21 points at 7,379.70.

Budget airline EasyJet flew higher after it announced it will now let customers book long-haul flights with other carriers, including Loganair, through its website.

Tesco was hit by a downgrade to ‘underperform’ at Exane BNP Paribas, ITV was lower after being cut to ‘underperform’ at Macquarie, and Esure was under the cosh after UBS downgraded the stock to ‘sell’ from ‘neutral’.

Infrastructure and construction company Balfour Beatty was slightly higher after selling Blackpool Airport for £4.25m.

Halfords was in the black after it poached fellow retailer Dixons Carphone’s software boss, Graham Stapleton, to take up the chief executive role.

From earlier…

Stocks on Wall Street set a new closing high on Tuesday after Hurricane Irma’s impact was less than feared tensions with North Korea began to ease.

The S&P 500, Nasdaq and the Dow Jones Industrial Average all closed at new highs, led by gains in financials.

Shares in Apple the most valuable US company, fell 0.42%  to close at $160.82 after the unveiling of the 10th anniversary edition of the iPhone.

The stock initially rose as much as 1% but then turned lower as the company confirmed much of what had already been leaked.

On Tuesday the FTSE 100 fell 0.17%, or 12.90 points, to 7400.69, after the pound rose to its highest level in a year on the back of stronger-than-expected UK inflation in August.

Consumer Prices rose by 2.9% in August against 2.6% in July. It is at its joint highest level in more than five years, adding to the Bank of England’s job this week of explaining why it is not raising interest rates.

JD Sports Fashion surged after it reported another record result for its half year, with sales up 41% to £1.4bn and pre-tax profit up 33% to £102.7m, while construction equipment specialist Ashtead racked up healthy gains as it reported strong growth in rental revenue and profits in the first quarter of its financial year.

Wood Group and Amec Foster Wheeler were in focus after the Competition and Markets Authority approved their merger plans.

Nearly £177million worth of profit-taking by bosses at Redrow and Cairn Homes led housebuilders to fall across the board yesterday, as investors became increasingly worried that the sector could have peaked.

Steve Morgan, chairman and founder of Redrow, sold a total of 25.9m shares in the firm through his investment company Bridgemere Securities and his charitable trust, The Steve Morgan Foundation.

Michael Stanley, chief executive of Cairn Homes, together with chief commercial officer Kevin Stanley and founder Alan McIntosh, sold 15.7million shares, pocketing the trio a tidy £24million.

The news sent shares in Redrow down by 8.3%  – the firm’s sharpest fall since Brexit – while Cairn Homes fell by 3.8%.

The market began to worry that housebuilding bosses have called the top of the market, and shares slipped across the board.

Shares in Bellway were down 1.7%, Persimmon edged down 2% and Taylor Wimpey fell 1.4%.

European shares rose to a five-week high, extending the relief bounce from the previous session.

Pierre Martin, a trader at Saxo Bank, said investors were keen on corporate and macroeconomic news rather than geopolitical and Irma worries.

Oil prices rose after OPEC forecast higher demand in 2018 and said output fell in August, signs that its production-cutting deal with non-member countries may reduce a supply glut.

The Organisation of the Petroleum Exporting Countries also said the two hurricanes that have hit the United States in recent weeks would have a “negligible” impact on demand.

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