Pound Gains and FTSE Struggles

The pound gained value on Wednesday, and this news weighed heavily on the FTSE 100, which was already weak after some unexpectedly positive retail data for the month of August left investors preparing for an interest rate hike from the Bank of England, which may come as early as November.

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shareprices.com - Wednesday, September 20, 2017

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Most European stocks were trading up, in anticipation of a policy decision from the U.S. Federal Reserve, however the FTSE 100 ended the day down by 0.1 percent - a modest recovery on it’s mid-day trading point, as the pound gave back some gains.

The FTSE 100 has fallen victim to low investor confidence, with early gains turning the index into the red, as investors wait for word from the Fed meeting, and are still concerned about what the Bank of England may be planning for later in the year.

The release of some strong retail sales figures has done little to help the index, as so many of the companies that are listed in the FTSE 100 take most of their earnings from abroad, and in foreign currency. The index benefits more from a weak pound, and from strong economic data from emerging countries that happen to be major consumers of basic materials.

Of the more local stocks, Kingfisher was one of the top performers, gaining 5.6 percent after it announced first-half profits that had exceeded expectations. Kingfishers shares have underperformed for most of this year, slipping by more than 10 percent, so the recovery will be welcome.

 

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