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FTSE fails to maintain post-Covid highs due to strong pound

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Simon Neville, PA City Editor
·3-min read
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The London Stock Exchange’s leading index dropped off from its post-pandemic highs reached on Friday but managed to remain above the psychologically important 7000-point barrier.

The FTSE 100 closed the day down 19.45 points at 7000.08 having crossed the threshold on Friday for the first time since the pandemic hit, wiping off 10% of the index’s value.

An easing of lockdown restrictions helped matters, retailers enjoyed the best of the spoils.

Shares in Sainsbury’s, Tesco Ocado, B&M, Kingfisher and Primark owner Associated British Foods were all in the top 10 risers.

A strong pound played its part in knocking back the index, with sterling reaping the benefits of currency traders in the US selling off the US dollar over inflation fears.

Connor Campbell, financial analyst at Spreadex, said: “The pound went on a tear this Monday, using a quiet session to indulge in some economic optimism following the first weekend under the latest set of eased restrictions in the UK.

“Sterling was especially strong against the dollar but then again, what wasn’t this afternoon?

“The greenback is having a minor tantrum over the Federal Reserve’s insistence that rising inflation will only be temporary, and therefore that the central bank won’t be taking any action to combat it.”

As markets in Europe closed, the pound was up 1.03% at 1.398 dollars.

It was also up against the euro by 0.54% at 1.162 euros as confidence over the UK’s Covid road map kept investors positive.

The German Dax was down 0.59% and the French Cac closed up 0.15%.

In company news, Melrose Industries announced plans to sell a majority of its Nortek arm to a US industrial group for £2.6 billion only five years after first buying the company.

Melrose said that it had struck a deal with Madison Industries over the heating, ventilation and air conditioning unit, although shareholders were less impressed, with shares down 8.25p at 170.6p.

Chemicals and technology giant Johnson Matthey signed a deal with state-backed Finnish company the Finnish Minerals Group to allow it to set up a new battery components factory in the country.

The FTSE 100 firm said that it would scale up its battery business with its second plant, near the Finnish city of Vaasa on the country’s west coast.

Shares closed up 12p at 3,198p.

Wagamama’s chief executive, Emma Woods, announced she was leaving the noodle restaurant chain after nearly three years in the role.

She took the top job shortly after it was bought by The Restaurant Group (TRG).

Shares in the firm closed up 0.8p at 124.6p.

And HSBC boss Noel Quinn revealed he is scrapping the executive floor at the company’s global headquarters in London, whilst introducing a more flexible work policy and hotdesking with colleagues.

Shares in the bank closed up 0.65p at 428.1p.

The biggest risers were Sainsbury’s up 6p at 254.7p; Ocado up 45p at 2,226p; B&M up 10p at 568.6p; United Utilities up 16.2p at 973.4p and Kingfisher up 5.4p at 360.7p.

The biggest fallers were Melrose down 8.25p at 170.6p; Flutter down 525p at 15,160p; Pershing Square down 80p at 2,710p; Evraz down 15.8p at 620.6p and Scottish Mortgage Trust down 29p at 1,216p.