FTSE Up - Pound Down

The pound has plunged to a new 31-year low against the dollar while FTSE 100 share index rose above 7,000 points.

13:28 05 October 2016

FTSE 100 share index has come close to an all-time high when it jumped by 1.3per cent to 7,074.34. London’s leading share index’s record high is 7,103.98. However, the pound has plunged to its lowest against the dollar, $1.2737, since 1985 at one point. Sterling has fallen for the past two days as traders study the Conservative Party conference for Brexit details. Against the euro, the pound was down 0.7% at €1.13840.

 

Meanwhile, the FTSE 250 share index closed at a record high to 18,342.07 after it jumped by 0.9per cent. Stock markets in Paris and Frankfurt also closed higher on Tuesday.

 

The FTSE 100 has benefitted from the fall in the pound because international companies whose shares are traded in the UK tend to benefit from it. Their profits earned abroad are worth more when converted into sterling.

 

The FTSE 250 index, on the other hand, lagged behind the FTSE 100 since the Brexit vote because gains from the weaker pound for the outward-looking businesses have been offset by fears about the fortunes of UK-focused companies.