Pound soars but markets sluggish after inauguration jubilation

Simon Neville, PA City Editor
·3 min read

Inauguration hangovers started to kick in on Thursday as the strong gains following the swearing in of new US president Joe Biden petered out.

The FTSE 100 closed the day down 24.97 points, or 0.37%, at 6715.42.

Sore heads were also not helped by a lacklustre update from the European Central Bank, where interest rates and further stimulus was left unchanged.

The bank’s president, Christine Lagarde, also warned the eurozone is expecting to see negative growth in the final three months of the year.

David Madden, financial analyst at CMC Markets UK, said: “Economic activity in the first quarter of 2021 will be dented due to the new harsher restrictions in countries like Germany, Italy, The Netherlands and France.

“Lagarde cautioned that domestic prices will continue to be subdued but she also expects upward pressure on inflation as the economy starts to recover. We might be waiting some time for the economy to pick up seeing as it will probably be months before a sizeable portion of the population is vaccinated.”

But there was better news in the currency markets, as hopes for the UK vaccine rollout helped the pound hit 32-month and eight-month highs against the dollar and euro respectively.

In Europe, the German Dax 30 closed up 0.05% and the French Cac 40 closed down 0.67%.

The pound was up 0.43% against the dollar at 1.371 and up 0.14% against the euro at 1.295 as markets closed.

In company news, the FTSE 100 upped the number of women in top jobs to six as Entain, the gambling company behind Ladbrokes and Coral, announced its new chief executive would be Jette Nygaard-Anderson.

She replaces Shay Segev just 10 days after he quit and days after suitor MGM Resorts pulled out of a more than £8 billion bid for the firm.

Shares closed up 8p at 1,278p.

Pets at Home continued its strong run during the pandemic as the pet ownership boom benefitted the retailer. Bosses revealed like-for-like sales rose 17.5% in the third quarter, with a 19.3% boost in the past month.

Shareholders enjoyed the latest news, with shares closing up 8.8p at 412p.

The Daily Mail and General Trust (DMGT) struggled after revealing a 2% fall in revenues from sales of its newspapers, including the Daily Mail and Mail on Sunday, in the three months to the end of 2020.

The Covid-19 pandemic also hit print advertising – down 38% – particularly on the freesheet Metro. An 8% rise in digital advertising was not enough to offset the falls.

Shares closed down 9p at 811p.

FTSE 100 accounting software business Sage saw a boost in sales thanks to strong growth in its subscription business. Revenues grew 1.4% in the final three months of 2020 to £447 million with growth expected to accelerate as the year goes on.

The biggest risers on the FTSE 100 were Sage up 28.2p at 601.2p; Just Eat Takeaway up 390p at 8,400p; Ocado up 103p at 2,675p; Aveva up 113p at 3,893p and Auto Trader up 16.6p at 583.6p.

The biggest fallers were Rolls-Royce down 4.1p at 103.3p; BP down 9.5p at 293.35p; IAG down 4.9p at 156.95p; Royal Dutch Shell B shares down 41.2p at 1,376.8p and Royal Dutch Shell A shares down 40.2p at 1,436.8p.