Leading shares are heading back towards a new peak, as the continuing slump in the pound pushes exporters and overseas earners higher.
The flash crash in sterling in the early hours of trading may have been an anomaly but the pound remains under pressure on fears of a hard Brexit, especially after tough talking from German chancellor Angela Merkel and French president François Hollande. Last weekend’s comments from UK prime minister Theresa May suggesting the focus in Brexit talks would be immigration controls rather than remaining in the single market started the rot in the pound.
But weakness in sterling has lifted dollar earners like mining stocks, so the FTSE 100 is up 43.27 points at 7043.23. This is not fall off its intra-day high of 7122 and its closing high of 7103.
Anglo American has added 34.1p to 1032.5p, BHP Billiton is 38.5p better at 1240.5p and Randgold Resources has risen 170p to £70.55. In all, seven of the top ten risers are mining shares.
Burberry, whose luxury goods are in demand in Asia, is up 29p at £14.54.
But easyJet continues to slide, down another 44.5p to 889p after Thursday’s profit warning. British Airways owner International Airlines Group has fallen 14.2p to 367.1p.
Among the mid-caps Fidessa, which provides technology for the financial industry, has fallen 87p to £23.77 after UBS cut from neutral to sell. UBS said:
We upgraded Fidessa to neutral in July, still cautious on its end market, investment banking, but arguing that its share price had corrected sufficiently post the UK referendum. We also noted that the sharp depreciation in sterling would benefit Fidessa’s bottom line and make it cheaper in non-sterling terms (Fidessa had been the subject of media reports as a takeover target earlier in the year; e.g. FT on 9th March). Since, however, although the pound has fallen further, the re-rating has overshot, we think, and we would advise investors in Fidessa to take advantage of the corresponding rally in its share price to sell the shares at the present current level.
