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London open: Stocks rise as weaker sterling boosts FTSE
Stocks in London rose in early trade as the weaker pound benefited exporters in the FTSE 100.
At 0830 BST, the index was up 1% to 7,055.59 as the pound continued to suffer on the back of Prime Minister Theresa May’s pledge to trigger Article 50 by March, trading down 0.5% to 1.2773 versus the dollar and 0.2% against the euro to 1.1434.
Spreadex‘s Connor Campbell said: “The pound’s protracted demise has continued to lift the multinationals that make up the FTSE 100, leaving the index back above 7,000 for the first time in 16 months. Just like yesterday the UK index’s rise will be tested by a PMI reading, with this morning the turn of the construction sector.
“Now trading under 1.145 against the euro, and 1.277 against the dollar, the pound finds itself at fresh 3 and 31-year lows respectively. It seems that it is going to be hard to provide a tourniquet for sterling’s recent wounds given the solidity of the newly announced Brexit timeline (with March set to go down in the history books as when Article 50 was triggered), and the firmness with which May stated her intention to chase border control even if it means relinquishing Britain’s position in the single market.”
Meanwhile, oil prices retreated. West Texas Intermediate was down 0.7% to $48.49 a barrel and Brent crude was 0.6% lower at $50.60.
“Now trading under 1.145 against the euro, and 1.277 against the dollar, the pound finds itself at fresh 3 and 31-year lows respectively. It seems that it is going to be hard to provide a tourniquet for sterling’s recent wounds given the solidity of the newly announced Brexit timeline (with March set to go down in the history books as when Article 50 was triggered), and the firmness with which May stated her intention to chase border control even if it means relinquishing Britain’s position in the single market.”
In corporate news, Astrazeneca was a little lower after it announced a disappointing drug trial but said its Tagrisso drug has been recommended by NICE.
FTSE 250 infrastructure company Carillion rose after renewing its contract with Nationwide Building Society for a further seven years for £350m, to provide facility management services at its branches and corporate offices.
Budget airline Ryanair flew a little higher after reporting a 13% jump in traffic for September to 10.8m customers.
Central and Eastern Europe-focused low-cost airline Wizz Air said on Tuesday that passenger numbers were up 17.9% to 2.14m, while the load factor – which gauges how full the flights were – edged up to 91.6% from 90.9%.
On the data front, investors will eye US construction PMI is at 0930 BST.
