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| FTSE 100 hits record high as Brexit fears push pound below $1.23 | FTSE 100 hits record high as Brexit fears push pound below $1.23 |
| (35 minutes later) | |
| The FTSE 100 index has gone above its all-time intra-day high, boosted by a sharp decline in the value of the pound. | The FTSE 100 index has gone above its all-time intra-day high, boosted by a sharp decline in the value of the pound. |
| The pound has fallen to its weakest level since the financial crisis in early trading on Tuesday as worries persists over the UK’s economic prospects outside the EU. | The pound has fallen to its weakest level since the financial crisis in early trading on Tuesday as worries persists over the UK’s economic prospects outside the EU. |
| This sent the FTSE 100 index of top blue chip shares to its intra-day record high. The index hit 7,129.21 – up 0.45 per cent or 31.68 points. | |
| Its previous intra-day record was 7,122.74 which it reached on 27 April 2015. | Its previous intra-day record was 7,122.74 which it reached on 27 April 2015. |
| The index has been boosted by retailers such as Next and Marks & Spencer, up 4.2 per cent and 3.1 per cent, respectively. | The index has been boosted by retailers such as Next and Marks & Spencer, up 4.2 per cent and 3.1 per cent, respectively. |
| The smaller FTSE 250 index, or the 250 biggest companies in the UK, has gained 0.7 per cent – close to the record high struck last week. | |
| The decline of the pound has boosted the FTSE 100 as many companies make a significant proportion of their profits abroad. | The decline of the pound has boosted the FTSE 100 as many companies make a significant proportion of their profits abroad. |
| However, the FTSE failed to hit a new closing high as a late afternoon selloff sent the index down by 0.38 per cent to 7070 points. | |
| Conner Campbell of SpreadEx said that Brexit worries have pushed shares prices down. | |
| The sight of top bankers from Citi and Morgan Stanley warning they could quit the City next year has also dented confidence. | The sight of top bankers from Citi and Morgan Stanley warning they could quit the City next year has also dented confidence. |
| Campbell said: "A lunchtime surge saw the FTSE smash through to 7129; now it’s back hovering below 7100, that midday burst of energy proving to be brief." | Campbell said: "A lunchtime surge saw the FTSE smash through to 7129; now it’s back hovering below 7100, that midday burst of energy proving to be brief." |
| "Perhaps reports that both Citi and Morgan Stanley have stated they will leave London if Britain appears to be heading for a hard Brexit have weighed on investors’ appetite for the UK index; perhaps it was a bout of profit-taking. Either way the FTSE couldn’t hold onto its highs for long." | "Perhaps reports that both Citi and Morgan Stanley have stated they will leave London if Britain appears to be heading for a hard Brexit have weighed on investors’ appetite for the UK index; perhaps it was a bout of profit-taking. Either way the FTSE couldn’t hold onto its highs for long." |
| Sterling was down 0.61 per cent at $1.2290 against the dollar in early trading on Tuesday - this would be a new 31-year low for the currency, if you ignored the flash crash that sent sterling tumbling by more than 6 per cent on Friday. | Sterling was down 0.61 per cent at $1.2290 against the dollar in early trading on Tuesday - this would be a new 31-year low for the currency, if you ignored the flash crash that sent sterling tumbling by more than 6 per cent on Friday. |
| It was still trading below $1.23 at 1.22208 at 5pm. | |
| Sterling has now fallen about 18 per cent against the dollar since the referendum, to lows not seen since 1985. | |
| The currency has been this year’s worst performer among 32 major currencies tracked by Bloomberg. | The currency has been this year’s worst performer among 32 major currencies tracked by Bloomberg. |
| Sterling has been under pressure for more than a week. At the Conservative Party conference, Prime minister Theresa May hinted she would opt for a “hard Brexit” settlement that sacrifices access to the single market and prioritises stricter immigration controls. | |
| Brexit Secretary David Davis dismissed calls for him and his fellow ministers to be “careful with their words” to prevent further volatility and sharp declines. | Brexit Secretary David Davis dismissed calls for him and his fellow ministers to be “careful with their words” to prevent further volatility and sharp declines. |
| Bank of England policymaker Michael Saunders said on Tuesday he would not be surprised if the pound fell further. | Bank of England policymaker Michael Saunders said on Tuesday he would not be surprised if the pound fell further. |
| HSBC analysts predicted the pound will fall to $1.10 against the dollar and hit parity against the euro by the end of 2017. | HSBC analysts predicted the pound will fall to $1.10 against the dollar and hit parity against the euro by the end of 2017. |