Friday 22 November 2019 4:54 pm

FTSE 100 soars above European rivals as pound weakens

The FTSE 100 jumped this afternoon, ending the week with a strong finish amid a drop in the pound and strong gains in some sectors.

The UK’s blue-chip index led its European counterparts upwards, rising 1.21 per cent.

Read more: Sterling falls as UK economy slows and US accelerates

France’s CAC 40 index had climbed 0.11 per cent, while Germany’s Dax had risen 0.17 per cent.

Mining, energy, financial and health care stocks all boosted the FTSE 100, ensuring the British index was the biggest gainer in Europe today.

“The FTSE 100 is up 90 points as the week winds to its close, but early gains in the US have been trimmed on concerns Chinese telecom firms will be designated as security risks,” said Christ Beauchamp, chief market analyst at IG.

He added: “In London the FTSE 100 is enjoying a strong end to the week, with a number of sectors rising, helped along by a decline in the pound – Labour’s manifesto will undoubtedly scare some international investors, who will be wary of investing in an economy so committed to redistribution.”

The pound edged down 0.6 per cent to the $1.28 mark in the wake of the first ever flash readings which showed a slowdown in services.

Read more: UK private sector output suffers worst fall in over three years

“The updates hit the pound, especially the services figures given the sector accounts for approximately 75 per cent of UK economic output,” said David Madden, market analyst at CMC Markets UK.

Chinese President Xi Jinping this morning said he wanted to work out an initial trade agreement with the US and said he has been trying to avoid a trade war. Yet he said China would not be afraid to retaliate if it had to.

“We want to work for a ‘phase one’ agreement on the basis of mutual respect and equality,” Xi said in Beijing.

“When necessary we will fight back, but we have been working actively to try not to have a trade war. We did not initiate this trade war and this is not something we want.”

Investors have responded positively to the remarks, seeing them as a statement of intent that could be important to ending the US-China trade war.

The trade tensions – which have led each side to tariff hundreds of billions of dollars of goods – have weighed on global growth in 2019 and dampened investor sentiment.

Xi’s comments came after a week of heightened tensions between the two sides. China responded angrily earlier this week to bills passed by the US Senate supporting protestors in Hong Kong, while US President Donald Trump has sounded ambivalent about the deal’s chances.

Joshua Mahony, senior market analyst at trading platform IG, said: “Markets appear to have found some sense of positivity in a week that has seen its fair share of pessimism over the growing feeling the trade talks may have ground to a standstill.”

The FTSE 100 also found some support from a falling pound, which makes the overseas earnings of blue-chip firms worth more. Sterling dropped after data showed the UK private sector had its worst month in three years in November.

Read more: New ECB president Christine Lagarde tells governments to hike spending to tackle downturn

On the FTSE, the biggest riser was British Gas owner Centrica, which yesterday reassured investors over an exodus of customers. It had risen 2.88 per cent to 81.61p.

Mining firm Glencore was the second-biggest climber, rising 2.84 per cent to 246.40p.