FTSE 100 turns lower as impact of Trump win sinks in

The FTSE 100 Index has slipped back for the second session in a row as investors take stock of Donald Trump's election win and the strengthening pound.

London's blue-chip index fell by more than 100 points, or 1.5%, during Friday trading, adding to a 1.2% decline the day before.

The falls can be partly explained by an upturn for the beleaguered pound, trading above $1.26 for the first time in more than a month.

Markets have been through a rollercoaster ride since Mr Trump emerged victorious on Wednesday.

The FTSE 100 index had plunged by 2% in just a few moments after the result emerged but quickly recovered.

Positive sentiment spread to Wall Street where the Dow Jones Industrial Average climbed to a record high on Thursday.

But by then the rally in London had already run out of steam.

The strengthening of the pound - bolstered by the prospect of improved trading relationships between a post-Brexit UK and a Trump-led US - was partly to blame.

Stronger sterling means global FTSE 100 firms' foreign currency income is less valuable when translated into pounds.

Meanwhile Mr Trump's focus on infrastructure spending to revive growth adds to anxiety about higher inflation and more interest rate rises by the US Federal Reserve.

That is a worry for emerging markets most sensitive to higher borrowing costs.

In London, Asia-focused Standard Chartered (HKSE: 2888.HK - news) dropped 7%. Volatile mining stocks such as Fresnillo (Other OTC: FNLPF - news) and Randgold Resources were also lower.

Oil giant Royal Dutch Shell (Xetra: A0ET6Q - news) was also a faller as the price of Brent crude fell 2% to below $45 a barrel.

Wall Street opened a little lower on Friday after its record highs.

Meanwhile the Mexican peso, battered by Mr Trump's win, hit new lows.

Yields on US government bonds climbed as the prospect of higher interest rates made them less attractive to investors.

Jasper Lawler, market analyst at CMC Markets (LSE: CMCX.L - news) , said: "The new Donald Trump vision for America is drawing the attention of international capital.

"This renewed belief in a better environment for corporate America is at the expense of Europe and especially emerging markets."