The pound is attempting to continue its recent rally this morning after bouncing yesterday afternoon from a brief dip below 1.21 against the US dollar. A rise in the currency alongside several negative developments for individual stocks has weighed on the FTSE which is lower by almost 1% on the day.
Carney throws a lifeline to sterling
The move off record low levels in the pound against the US dollar on Tuesday came after the Bank of England Governor Mark Carney testified before the house of Lords. Mr. Carney hinted that the central bank doesn’t want the currency to fall too far and called some of the doom and gloom in the markets around the Brexit situation as ‘mistaken’. After an 18% fall since the pre-referendum spike, the governor suggested that the inflationary impact of the rapid drop could lead him to oppose any further interest rate cuts or alternative monetary stimulus measures.
Antofagasta (LON:ANTO) leads FTSE lower
By far and away the biggest falling stock on the leading UK benchmark this morning is Antofagasta with the London-listed copper miner seeing its share price plummet after the release of a downbeat production update. The release warned that the firm’s output will be close to the lower end of its predicted range at the end of the year and has clearly worried investors, sending the stock lower by more than 6%.
Elsewhere the third-quarter trading update from Lloyds Banking Group (LON:LLOY) has also been poorly received, after profits sank due to the bank putting aside more cash to compensate customers who were sold insurance products they didn’t need. Shares in the company that still has a large taxpayer stake in it are lower a little under 2%. As you’d expect with a significant decline in the broader index, only a handful of shares are in the green on the FTSE 100. Airlines are performing well once more as news that Heathrow will be getting a third runway has boosted International Consolidated Airlines and easyJet (LON:EZJ) with both shares looking to add to the gains seen already this week.
Vodafone (LON:VOD) fined record amount
News has broken this morning that Vodafone has been fined £4.6m by Ofcom for "serious and sustained breaches of consumer protection rules". The fine itself relates to the mobile phone company misleading pay-as-you-go customers over top-up payments. The fine will likely cause some reputational damage to Vodafone after more than 10,000 of its customers lost out when the firm failed to credit their accounts after they had paid to top up their mobile phone credit.
Whilst the number of affected customers is minimal compared to the total 20 million Vodafone users in the UK, the ongoing investigation which led to the fine has been an unwanted headache. With the matter now put to bed, investors will hope that the firm can move on and look to build on a solid - if not spectacular - year so far which has seen the stock rise around 10%. Given the external headwinds such as this investigation and the EU referendum shock, this performance may be viewed as relatively favourable and the telecommunications company will likely be pleased to have drawn a line under the whole incident and take their medicine in the form of a sizeable fine which incidentally, is the single largest to have ever been issued by the telecoms regulator. Shares are lower by around half a percent at the time of writing.