A firmer pound pulled down UK’s exporter-heavy FTSE 100 on Tuesday after three sessions of gains, while Restaurant Group surged after it forecast upbeat sales numbers.
The blue-chip index <.FTSE> dropped 0.5% and lagged its European peers, as the pound rose above $1.30 for the first time in three weeks with investors scaling back bets on UK interest rates turning negative.
Midcap stocks <.FTMC> rose 0.4% as gains in consumer and industrial firms outweighed losses in healthcare companies.
A survey showed Britain’s construction industry unexpectedly picked up speed last month, helped by a post-lockdown bounce in the housing market.
“The market is keeping trades on hold for now and is waiting out for more macro data, with traders also focussing on Prime Minister Boris Johnson’s speech and a parliament vote to lift pub curfews due later in the day,” said Keith Temperton, a trader at Forte Securities.
Britain will prioritise trying to save jobs over tax rises while the COVID-19 pandemic batters the economy, though record borrowing and a $2.6 trillion debt pile cannot be sustained for ever, finance minister Rishi Sunak said.
A raft of stimulus measures and re-opening optimism have helped the FTSE 100 bounce from its March lows.
However, rising economic stress due to a resurgence of COVID-19 cases and a stronger pound have kept the index in a tight range, with investors hoping for more support as the economy faces its worst recession in more than 300 years.
Frankie and Benny’s owner Restaurant Group gained 4.95% after it unveiled improved like-for-like sales numbers for the period since the start of July. Premier Oil jumped 10% after it reached an all-share merger deal with oil exploration and production company Chrysaor.
(Reporting by Shashank Nayar in Bengaluru; editing by Uttaresh.V and Subhranshu Sahu)