FTSE drifts down, while sterling rallies
|It is another cautious session across indices, with the FTSE 100 down 35 points in mid-morning trading.
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Equities drop back once again.
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Euro and sterling in bullish form versus the dollar.
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Associated British Foods looks to a second half boost from Primark.
Stocks continue to drift lower, hit by a lack of major news that leaves investors waiting for further high profile earnings that might reverse the trend and provide a boost to equity markets. Weakness in European markets has been exacerbated by the strength in the euro and sterling, which have enjoyed good gains against the dollar over the past few sessions. The UK employment picture appears to be brightening, providing a further reason to stick with UK assets across the board; while the recovery has a long way to go the path appears to be the right one, and should see additional inflows for the UK as the year progresses. The lack of any further bad news on Brexit has provided another foundation for sterling gains and as the rebound in EUR/GBP continues to fade it looks like investors are still opting for the UK over Europe.
Food sales carried Associated British Foods through a tough year during which its Primark stores suffered heavily thanks to lockdowns and the lack of an online presence, but the hope now is that the reopening of the UK high street will help spread the load more evenly. The return to dividend payments certainly underlines the renewed confidence in the year ahead, although unsurprisingly the shares are a little softer this morning after a 9% rise for the year so far.
Ahead of the open, we expect the Dow to start at 34,047, down 30 points from Monday’s close.
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