A fall in sterling following the announcement that inflation had hit his highest level in four years sent the FTSE 100 to 7532 at 3pm today, before settling at 7522 at the time of writing (3:30pm) breaking yesterday’s record in the process.
The London index peaked at 7458 yesterday (15 May), thanks to rallying oil prices and Chinese infrastructure demand. Oil prices began to climb following Saudi Arabia and Russia agreeing to continue cutting oil production into March 2018, while president Xi of China’s plans to build infrastructure and transport links throughout Asia and beyond saw shares in mining companies rise.
The FTSE 100 has been enjoying a particularly strong run in recent months, despite warnings that Brexit could derail the market. This has been largely due to a weaker pound causing shares to become cheaper for overseas investors to buy. Sterling has slid to a seven-week low today, giving companies on the index with revenues from abroad a boost.
The biggest winner today has been Vodafone Group, who rose by 4.5 per cent after promising stronger performance in this financial year, compared with the last. The company exited from India after an unsuccessful foray into the market which contributed to losses of $6.1bn last year. This, plus a 2 per cent increase in the company’s dividend has seen its share price rise. Meanwhile, mining giant Rio Tinto continued to benefit from yesterday’s news, rising by 2.7 per cent, and multinational retailing company Kingfisher saw shares advance by 2.5 per cent.
EasyJet and Hargreaves Lansdown both fell by 6.4 per cent today, while software and IT business Micro Focus declined by 2.4 per cent.
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