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FTSE 100 gains on weaker pound

Written by Business World, on 22nd May 2019. Posted in World

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The exporter-heavy FTSE 100 index gained on the back of a weaker pound on Wednesday as lawmakers signaled they would not back Prime Minister Theresa May's latest Brexit compromise, while Marks & Spencer slumped on news of a discounted rights issue.

The main index, whose companies get more than two-thirds of their profit from abroad, was up 0.3% at 0816 GMT, while the more domestically-focussed FTSE 250 was up 0.1%.

The indexes outshone European and Asian counterparts, where confidence was hit by media reports the United States is considering Huawei-like sanctions on Chinese video surveillance firm Hikvision.

A slide in sterling led internationally-exposed companies British American Tobacco, Unilever and Diageo to be among the biggest risers on the FTSE-100.

In contrast, blue-chip housebuilders including Persimmon and Barratt lost more than 2% after gaining in the previous session when May unveiled her new Brexit deal.

M&S slid 5% to a more than four-month low after it priced a rights issue at a big discount to Tuesday's close. It also reported a third straight decline in annual profit, emphasizing the pain of its latest turnaround plan.

SSE slipped 2% after reporting a slump in annual earnings and warning of an uncertain outlook due to the opposition Labour party's plans to renationalise energy networks.

Strong earnings reports lifted the mid-cap index, despite the pound's weakness.

Financial trading platform IG Group surged 9.1% after it unveiled a plan to drive growth even as it forecast a drop in full-year net trading revenue and operating profit.

That helped rivals Plus500 and CMC Markets to gains of 4.4% and 2.1% respectively.

Royal Mail, the former postal monopoly, gained 7.2% - its biggest one-day rise in 5-1/2 years - as investors focussed on the company's new five-year turnaround drive instead of a dividend cut.

Pets at Home jumped 10% after reporting better-than-expected revenue and forecasting higher earnings for 2020.

Weighing on the index was engineering services group Babcock , which tumbled 9.1% after saying it expected revenue and underlying operating profit to fall in 2019/2020. (Reuters)

Source: www.businessworld.ie

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