FTSE Gains But Pound Falters

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FTSE Gains But Pound Falters

The FTSE 100 stumbled to a record close yesterday after the wind was knocked out of the pound's sails by solid USA job figures and a closely watched economic survey across the Atlantic hitting a 12-year high.

The blue chip index ended the day up by just 0.07% but was enough to break the record high for the second time in a month. The UK's leading index inched up by 5.06 points, to close at a new all time high of 7,560.35.

Since numerous firms in the index are multinationals with revenues in foreign currencies, a weaker sterling tends to support profits and valuations.

One analyst says further gains are likely with the "upward trend" in tact after the Bank of England raised the interest rate.

"Cash savers might still be waiting for the latest interest rate rise to feed through into their bank accounts, but stock market investors continue to reap the rewards of loose monetary policy and an improving global economy", said Laith Khalaf of Hargreaves Lansdown.

The central bank warned that Brexit uncertainties were still weighing on domestic activity and that any future hikes would be at a "gradual pace and to a limited extent".

The FTSE 250 also ended the day with a record high of 20,472.38 points - up 0.43%.

A reading above 50 is an indicator of growth.

Sterling had been beginning to claw back some of Thursday's 1.6pc plunge against the dollar in early trade following an expectations-beating services PMI reading but its momentum versus the greenback was halted by economics figures from the United States indicating a tight labour market and continuing growth momentum. However, the index itself only mustered a 0.07 per cent rise.

The biggest risers on the FTSE 100 were NMC Health up 127p to 3,089p, Johnson Matthey up 93p at 3,503p, Coca-Cola HBC up 70p at 2,638p, and Kingfisher up 7.5p at 317.1p.

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