LONDON (Reuters) - Britain’s blue-chip index broke fresh records on Monday, pushed up by rallying resource stocks and a weak sterling.
The FTSE 100 .FTSE touched a new record high of 7,243.76 points, then settled at 7,237.77 points, up 0.4 percent, for the close. It chalked up its tenth straight daily session of gains.
The index tends to gain as sterling drops, due to a large number of dollar-earning constituents.
“The FTSE is still currency-led, with Brexit uncertainty over the weekend grinding it higher,” said Mark Ward, head of execution trading at Sanlam Securities UK.
“I don’t think these markets will go lower anytime soon.”
The pound slid more than 1 percent to a ten-week low against the dollar after comments over the weekend from Prime Minister Theresa May reignited fears of a “hard Brexit”.
Strong performance in basic resources and consumer stocks also underpinned the index.
Glencore led the FTSE, closing up 3.6 percent, supported by a note by Barclays reiterating its ‘overweight’ rating and increasing its target price on the stock.
Outsourcing company Capita Plc CPI.L was the top faller, followed by Land Securities Group LAND.L and Royal Bank of Scotland RBS.L which, along with the vast majority of European banks, tracked lower. Some traders said there was a move back to reality after a holiday rally.
Capita, which ended down 2.9 percent, has been under pressure from a string of analyst downgrades. UBS cut its target price on the stock from 675p to 540p.
Banking stocks were in focus after the British government sold enough shares in Lloyds Banking Group LLOY.L to cede its position as top stakeholder in the bank. Shares in Lloyds gained initially on the news but the stock finished down 1 percent.
“Amid a wider backdrop of rising inflation, there is a feeling that perhaps the government sold a little early, as the bank is yet to benefit from the boost that will come once interest rates rise,” said Josh Mahony, analyst at IG.
Reporting by Helen Reid; Editing by Tom Heneghan
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