At the close: FTSE 100 dips as pre-BoE jitters seize European markets

Billy Bambrough
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Brexit Fears Continue To Hit Financial Markets
Investors are hoping governor Mark Carney turns on cheap cash taps at the Bank of England's monetary policy meeting tomorrow (Source: Getty)

The FTSE 100 has dialled back its earlier gains to skid at the close this evening.

The blue-chip index finished down just a touch at 6,670.40, off by 10 points – or 0.15 per cent. It's the second flat close on the bounce for the FTSE 100 after ending yesterday's session unchanged.

It had earlier in today's session climbed to 6,717.17.

The FTSE 250 – seen as a better measure of UK business health than the international FTSE 100 – underperformed the top tier index, dropping by 0.3 per cent to 16,751.02.

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The pound suffered the same fate as UK equity, slipping as investors turned their attention to a possible rate cut by the Bank of England tomorrow.

Sterling climbed to dizzying highs of $1.3338 earlier the in day to – wait for it – its highest level in 13 days as investors marvelled at the stability promised by the anointing of Theresa May.

They had a little wobble at the end though, as the spectre of the Canadian bank governor Mark Carney was seen sharpening his axe. It dropped 0.78 per cent in evening trade to $1.3176.

Joshua Mahony, market analyst at IG, said:

After all the political dramatics of late, it feels as though we have reached a conclusion with the appointment of Theresa May.

However, the work starts now for May, who has arguably one of the shortest campaigns in British history, with the UK going from Cameron's resignation to Mays appointment in the space of 19 days.

Markets will be watching carefully at the appointments being made, most notably for whether a new chancellor is appointed, with anti-Brexit hawk Phillip Hammond being touted.

Amongst equity the FTSE real estate index was erroded 0.6 per cent after building for four straight sessions.

Taylor Wimpey and Berkeley Group dropped by 0.7 and 2.7 percent respectively, while the market weren't impressed by comments from Barratt Developments.

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It warned the Brexit bugbear was causing it to consider slowing the pace of construction and rethink its land buying programme.

On the positive side fashion house Burberry rallied after reporting a three per cent like-for-like drop in retail sales in the first quarter.

Analysts had been braced for a five per cent fall and celebrated by buying into trench coats.

Engineering firm Rolls-Royce was another riser as news emerged from the rain-sodden Farnborough Airshow.

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Chief executive Warren East said it could it could be a whopping £1bn more profitable if it combines its cost cutting plans with its sales targets.

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