Sterling stutters with all eyes on the US as FTSE 100 closes sluggish day on London's markets

 
Jasper Jolly
BRITAIN-EU-BREXIT-POLITICS
Markets paused before next week's political set piece events (Source: Getty)

Markets in London ended the week with a sluggish day performance, as a lull before next week’s data releases and the trigger of Article 50 resulted in little movement.

The FTSE 100 edged down by 0.07 per cent to close at 7,335.63 points.

Smiths Group led the market after it more than doubled pre-tax profits in its first half, sending shares up by 3.02 per cent. The engineering company pointed to strong sales of X-ray machines as it benefited from heightened security concerns.

Read more: Investors look beyond Trump's healthcare travails to tax cuts

Paper packaging company Smurfit Kappa was the biggest faller at the other end, as it lost 2.97 per cent to retreat further from February’s recent share price highs.

Meanwhile Ashtead Group was dented further by the scepticism of investors in the Trump trade, as political obstacles to his healthcare reform mounted. A failure to complete healthcare reforms could lead to doubts over US President Donald Trump’s ability to carry out growth-boosting tax reforms.

The equipment hire company is set to benefit from the boost to infrastructure Trump promised (including his infamous wall on the Mexican border). Shares fell by 2.49 per cent.

Chris Beauchamp, chief market analyst at IG, said: “The problem for markets is that we remain in a news-light environment. Equity and economic news has not been of the real blockbuster variety, which leaves Washington-watching as the only game in town.”

Read more: What will happen to the pound after Theresa May triggers Article 50?

Sterling weakened against the dollar to hit lows of $1.2469 at the time of writing, with few drivers of currency movements during the day.

The pound’s fortunes are likely to be impacted more next week by early signals on the prospects for the UK’s trade relationship with the EU after Brexit.

Prime Minister Theresa May will trigger Article 50 of the Lisbon Treaty to officially begin the process of leaving the EU on Wednesday.

Paul Hollingsworth, a UK economist at Capital Economics, said: “The sending of the notification itself is unlikely to be a significant catalyst for further sharp falls in sterling, but markets will be focused over the coming weeks and months for any signs of how the negotiations are progressing.”

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