FTSE 100 tumbles to its lowest in six weeks as the pound rises sharply

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The FTSE was dragged lower by Burberry (Source: Getty)

The FTSE 100 closed at its lowest point in six weeks as a sharp rise in the pound pushed it lower.

The index finished the day 0.7 per cent lower, at 7,435 points, having fallen to its lowest point in weeks earlier in the day.

The selloff came as sterling rose 0.45 per cent against the dollar, to $1.3204, while it climbed 0.37 per cent against the euro, to €1.1334, after Brexit negotiators suggested progress had been made in the latest round of talks. 

FTSE 100

Fallers   Risers  
Bunzl -6.2% Barratt Developments +1.5%
Burberry -2.2% Sainsbury's  +1.2%
GlaxoSmithKline -2.2% Merlin Entertainments +1.1%
SSE -2.2% Imperial Brands +1%

Distribution giant Bunzl was the biggest faller after analysts at Morgan Stanley warned in a note that it could be threatened by Amazon's intention to target business to business distribution.

Burberry's shares fell for the second day in a row after new chief executive Marco Gobbetti announced plans to push it upmarket failed to impress investors yesterday.

Losses were extended today after UBS downgraded it, changing its rating from "buy" to "neutral". But Albert Frere, Belgium's richest man, didn't listen, increasing his holding in the company from four to six per cent. 

"The FTSE 100 has seen a week characterised by selling finished off in style with the index hitting [its lowest] ebb in over a month thanks to a sharp rise in the pound," said Joshua Mahony, market analyst at IG. 

"The pound has been a big outperformer thanks to the release of impressive industrial and manufacturing production figures this morning," he added.

"Early gains [in the pound] were built upon amid the latest comments from Michele Barnier who showed that despite a shortening timeline, there is still a chance to start trade talks in December. David Davis now has a fortnight to agree a divorce payment or else wait until March to begin trade talks."

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Tags: FTSE 100