The FTSE 100 finished a week of consecutive falls with a recovery in Friday trading that was held back only by Amazon’s shock swoop for Whole Foods.
The online retail giant’s move into groceries weighed on supermarket shares, as investors dumped the stock of potential British rivals.
Shares in Tesco, Sainsbury’s and Marks and Spencer all fell steeply after news of the deal emerged at lunchtime. Both Tesco and Sainsbury’s shares lost more than four per cent, making them by far the worst performers on the index, while Marks and Spencer lost 2.25 per cent.
Yet apart from the retail sector London’s main index enjoyed a solid recovery from a week in which investor confidence was severely dented by the shock General Election result last Thursday.
Stronger oil futures prices boosted BP and Royal Dutch Shell shares earlier in the day, but the best performer during the day was digital payments company Worldpay Group, which surged to a new all-time share price high of 324p.
The year-to-date gain of the payments group, carved out of Royal Bank of Scotland when the state bailed it out, now stands at 23 per cent after a strong rise in profits since last year.
The FTSE 100’s stronger performance came in spite of sterling gaining ground in the aftermath of a shock hawkish move on the Bank of England’s monetary policy committee yesterday, which saw investors forced to position for an earlier interest rate hike than had previously been forecast.
Sterling briefly broke through $1.28 against the US dollar during afternoon trading, but the currency failed to gain more momentum as political uncertainty over the government’s Brexit negotiating strategy continues to hold back market optimism.
The pound lost ground against the euro, which was buoyed by the resolution of long-running bailout talks with Greece and a diminishing political risk outlook on the continent.
However, further gains for the euro were held back by the failure of the Greek talks to address debt relief, the big issue still remaining before Greece can rejoin capital markets and begin functioning properly once more.