FTSE slightly up as dollar weakens

Falling oil prices and some respite for the weakening US dollar helped prop up the London market today.

Falling oil prices and some respite for the weakening US dollar helped prop up the London market today.

The FTSE 100 Index edged into positive territory in late trading, ending the day 1.1 points ahead at 4717.7.

The price of a barrel of US light crude was on the downward slope after reaching recent highs, off nearly a dollar at just over $48 in late trading.

Analysts said the fact that the greenback’s recent slide had stabilised of late also had seemed to offer the London index a degree of short term support.

Yesterday, the dollar – whose weakness hits European and Far East exporters who trade in the US – stayed under pressure, although it recovered slightly from record lows against the euro. It was trading at $1.8589 against the pound and at $1.4375 against the euro late this afternoon.

With economic news scarce in New York ahead of tomorrow’s Federal Reserve decision on interest rates, investors were banking cash after last week’s strong run. The Dow Jones Industrial Average was 20 points adrift shortly after London’s close.

In London, the economic news was positive, with official figures showing that exporters enjoyed their best month in more than two years as the UK trade gap narrowed to £4.5bn (€6.5bn) in September.

On the corporate front, directories group Yell retained its position at the top of the Footsie risers, putting on more than 5% or 20p to 390p, after reporting half-year profits of £85.6m (€123.2m) against pre-tax losses of £109.7m (€157.9m) a year ago.

Yell said an “excellent” performance by its US arm and continued growth of its online business left it on track to meet full-year market expectations.

Troubled retailer Marks & Spencer was in negative territory, down 2.75p to 350p, after it announced profits of £292.7m (€421.2m) for the six months to October 2, compared with £325.1m (€467.9m) a year earlier. Chief executive Stuart Rose said the business required “radical change”.

Banking stocks were among the heaviest fallers, led by Abbey National, which weakened 10p to 625.5p as it prepares for a takeover by Spain’s largest bank. Other losers in the sector included Lloyds TSB, off 1.75p to 431p despite announcing plans to transfer up to 1,000 British jobs to India.

Outside the top flight, fashion group Marchpole Holdings added 0.25p to 33.5p as it hailed a new deal to make clothing for prestigious menswear label Emanuel Ungaro. The group posted a 216% rise in half year pre-tax profits to £2.5m (€3.6m).

However, funeral services operator Dignity saw its shares slip 2p to 307.5p despite announcing a sharp rise in profits, as it confirmed the death rate was 3.5% lower than last year.

The day’s biggest risers were Yell Group, up 20p to 390p, Cable & Wireless lifting 2p to 109.5p, Xstrata gaining 13.5p to 882.5p and Allied Domecq strengthening 7.75p to 514.75p.

Largest losers included Capita Group, off 6.5p to 362p, Abbey National down 10p at 625.5p, Hanson losing 6.5p to 417p and Exel weakening 11p to 725p.

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