The FTSE 100 index has been little changed in London in today’s session, with gains in companies with international exposure offsetting a drop in banks, as the pound tumbled to a three-month low amid concerns that the UK could face a ‘hard Brexit’ from the European Union following last year’s referendum.
As of 12:07 GMT, the Footsie had added 3.06 points to stand 0.04 percent higher at 7,340.87, having touched a fresh record high of 7,354.14 earlier in the session. The FTSE 100 is outperforming other European indices, having found support in sterling’s drop amid expectations that Prime Minister Theresa May will signal a ‘hard’ Brexit for Britain when she gives a speech tomorrow. The pound’s retreat is benefitting blue-chips with international exposure, which generate revenue outside the UK.
Gains in the Footsie, however, have been capped by a pullback in banking stocks. Barclays (LON:BARC) is currently leading other London-listed lenders lower, having shed 2.05 percent to 230.43p so far today.
“Having access to the single market is key for (the banks), or indeed if they can’t have access, then what the particular requirements of the passporting might be for them to be able to still do business across Europe,” Dafydd Davies, partner at Charles Hanover Investments, told Reuters. “If it is a genuinely hard Brexit and then they have to look at relocation costs, that could be quite substantial for them. However at the moment, it’s very much a wait-and-see situation.”
The FTSE 100 index was 0.08 percent up at 7,343.33 points as of 12:16 GMT on Monday, 16 January 2017.