FTSE treads water as US dollar falls off its highs
The FTSE 100 had edged up by just 0.08%, or 6.15 points, at the end of the day, to 7,306.14.
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Your support makes all the difference.The FTSE 100 trod water and the pound enjoyed an uplift as midterm elections commenced across the pond in the United States.
London’s blue-chip index lost about 50 points during its lows of the day, dragged down by debt-burdened Irish firm DCC and downbeat housebuilder Persimmon.
But it managed to claw back its losses and had edged up by just 0.08%, or 6.15 points, at the end of the day, to 7,306.14.
Could we already have seen peak US dollar?
The pound hit its highs of the month so far, pushing close to 1.16 US dollars as the American currency weakened. When European markets closed, it was up 0.7% to 1.159 US dollars, and was hovering on zero against the euro, at 1.1484.
It comes as voting got under way in the world’s biggest economy as Republicans seek to take control of Congress.
Michael Hewson, chief market analyst at CMC Markets UK, said: “Could we already have seen peak US dollar?
“Looking at the US dollar index and the price action in the euro against US dollar, there might be a case for such an argument, with the euro back above parity, and finding support at higher levels.
“Since the peaks back in September, the US dollar index has been trending lower, with lower highs and lower lows despite the rise in US yields.
“The pound is also edging higher on reports that there might be a breakthrough between the UK and EU on the Northern Ireland border, with cable putting in its highest level this month above 1.1550.”
The German Dax enjoyed strong gains on Tuesday. It was up 1.12% when markets closed, while the French Cac saw a softer jump of 0.37%.
New York stocks held onto the momentum from the past few days as voting kicked off. The S&P 500 was up 1.24% and Dow Jones had lifted 1.5% when European markets closed.
Meanwhile, Brent crude oil took a dip amid fears of declining fuel demand in top importer China. It was down 0.81% to 97 dollars a barrel.
In company news, Primark’s parent company said that the budget brand will not up prices any more than already planned until next summer, as it pledged to “stand by” customers.
AB Foods raked in pre-tax profits of £1.1 billion in the year to mid-September and it saw a boost in its revenues. Its share price was up by 2%.
Meanwhile, it was a difficult day for housebuilding giant Persimmon which has been caught up in the tide of tougher selling conditions in the property market.
Much higher customer cancellations and slumping forward sales could impact its profit margins, the group warned.
Investors reacted to the gloomy outlook and shares in Persimmon were down by 5.2%.
Insurer Direct Line said it would be launching more basic and affordable car insurance policies after seeing a reduction in new business sales.
The company has upped prices by 15% over the first half of the year for its new business car insurance policies following a surge in claim costs.
Shares in Direct Line fell as much as 8% in early trading on Tuesday but ended the day 3.1% lower.
The biggest risers in the FTSE 100 were B&M European Value Retail, up 15.7p at 372.7p, Frasers Group, up 31p at 737p, Ocado Group, up 703.6p, Fresnillo, up 33p at 807p, and Endeavour Mining, up 67p at 1,648p.
The biggest fallers of the session were DCC, down, 407p at 4,537p, Persimmon, down 69p at 1,254p, Harbour Energy, down 18.2p at 389p, BP, down 16.1p at 485.7p, and Admiral Group, down 55p at 1,929.5p.