The UK's biggest companies are set to end the week in fine form despite a stronger pound, as higher oil prices and waning political drama buoy London-listed stocks.
London’s main FTSE 100 index gained around 0.6 per cent at the time of publication to move back towards the 7,500 mark after a week of steady investor selling. Gains were broadly shared around the index.
The broader FTSE 250 gained even further, with shares jumping by 0.85 per cent at lunchtime after sustaining its worst day of 2017 yesterday.
Read more: The FTSE 250 just had its worst day of 2017
Oil prices helped the indices as Brent crude futures prices strengthened markedly. That boosted oil majors BP and Royal Dutch Shell, two of the index’s largest constituents. Shares rose by 1.27 per cent and 1.18 per cent respectively.
The index jumped a week ago in the aftermath of the Conservative government’s shock loss of their Parliamentary majority. The pound’s immediate fall boosted FTSE multinationals.
Yet today’s gains came in spite of a stronger pound, usually a drag on the FTSE 100, which is heavily exposed to dollar earnings.
Sterling has gradually gained since yesterday’s Bank of England surprise monetary policy announcement.
While the Bank made no move on its key interest rate, the rate-setting monetary policy committee (MPC) shocked investors with a marked hawkish move. Three of the eight economists on the committee voted to hike interest rates in the face of higher inflation, boosting the pound and the yield on UK government gilts.