Stronger pound drags FTSE 100 lower; midcaps outperform

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imageStock Markets4 hours ago (Apr 26, 2021 09:55)

© Reuters. FILE PHOTO: The London Stock Exchange offices in the City of London, Britain

By Devik Jain

(Reuters) -London’s FTSE 100 edged lower on Monday as heavyweight export-oriented companies slipped on a stronger pound, while a rally in shares of IMI (LON:IMI) helped the mid-cap index outperform the blue-chip index.

The FTSE 100 fell 0.1% as large dollar-earning consumer staples companies such as Diageo (LON:DGE), British American Tobacco (LON:BATS), and Unilever (LON:ULVR) dropped after the pound strengthened.

However, the losses were limited as miners added 1.4% after copper prices hit their highest in over 10 years. [MET/L]

Aero and defence stocks also rose, with Rolls Royce (LON:RR) jumping 3.7% after it said on Friday it was in constructive talks with Spain over the sale of its Spanish unit ITP Aero.

The domestically focussed mid-cap FTSE 250 index added 0.3%. Engineering firm IMI jumped 7% to the top of index after it raised its annual profit outlook.

Globally, the mood was upbeat amid concerns over rising cases in parts of Asia ahead of U.S. Federal Reserve’s meeting, series of economic data and earnings reports from U.S. tech heavyweights and big UK banks this week. [MKTS/GLOB]

“With a data calendar as juicy as this week, Monday morning COVID-19 nerves are likely to be quickly forgotten,” said Jeffery Halley, senior market analyst at OANDA.

The FTSE 100 has gained 7.3% year-to-date as encouraging economic data on the back of speedy COVID-19 vaccinations and constant policy support from the government lifted optimism about a stronger economic recovery.

Goldman Sachs (NYSE:GS) expects Britain to grow by a “striking” 7.8% this year, more than the United States following a nearly 10% slump last year as it was hit by longer coronavirus lockdowns than many of its peers.

Global education group Pearson rose 2.2 after posting a 5% increase in underlying revenue growth in the first quarter, helped by strong demand for online learning courses.

Food ingredients maker Tate & Lyle (LON:TATE) added 6.2% after saying it was exploring the sale of a controlling stake in its commercial sweeteners unit and separate it from its food and beverage solutions business.

Stronger pound drags FTSE 100 lower; midcaps outperform

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