FTSE at two-month peak as sterling falters
Reuters
Published Oct 06, 2017 17:37
FTSE at two-month peak as sterling falters
By Kit Rees and Julien Ponthus
LONDON (Reuters) - British shares edged higher on Friday and held to their highest level in two months as political uncertainties linked to Theresa's May's premiership pushed the pound lower, giving a boost to dollar-earning groups such as pharma stocks.
The FTSE 100 index (FTSE) closed 0.2 percent up at 7,522.87 points, with Britain's pound on track for its worst week in a year as the Prime Minister hit back at a plot to topple her, saying she would provide "calm leadership" to the country.
"The talk of a leadership plot against the Prime Minister is eroding the pound's value and propping up the FTSE 100," CMC Markets analyst David Madden wrote in a note to clients.
Last month sterling strength helped the FTSE 100 to post a slight decline for September, but the currency has since been losing steam and the index has posted its biggest one-week gain since December last year.
Health stocks, which source a sizeable chunk of their revenue from the United States, were among the biggest gainers. Heavyweights GlaxoSmithKline (L:GSK) and AstraZeneca (L:AZN) rose by about 0.3 percent and 1 percent respectively.
British American Tobacco (L:BATS) was up 1.6 percent and Imperial Brands (L:IMB) advanced by 0.2 percent.
Shares in budget airline easyJet (L:EZJ) dropped by 1.6 percent, the biggest FTSE 100 faller, after a price target cut from broker Credit Suisse (SIX:CSGN).
The airline also posted a mixed pre-close update, with analysts pointing to pricing pressures despite easyJet reporting a record summer and saying that it expects to reach the higher end of its profit range.
"Revenue trends are improving, but pricing remains under pressure," Liberum analysts said in a note.
Credit Suisse analysts saw some supportive factors, however.
"With Monarch's failure, Air Berlin's break-up, Alitalia's administration and Ryanair capacity cuts, we expect this confluence of positives must help EZJ (easyJet) pricing," they said in a note.
Shares in building materials company CRH (L:CRH) fell by 1.3 percent after its offer for U.S. Ash Grove Cement Co (PK:ASHG) was surpassed.
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Written By: Reuters
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