Weaker pound pushes FTSE 100 higher; PMI data disappoints

Credit: REUTERS/Luke MacGregor

By Shashank Nayar

Sept 23 (Reuters) - London's FTSE 100 rose on Wednesday for the second consecutive session as the largely export-focussed index benefited from a weaker pound following fresh COVID-19 curbs in the UK, while economic recovery slowed as household demand weakened.

Britain's recovery from the coronavirus lockdown lost some momentum in September, a business survey showed, as consumer-facing sectors suffered from the end of a government subsidy to support restaurants and more general COVID-related worries.

The FTSE 100 gained 2.0%, with the pound hovering near its two-month low. The UK government unveiled long-lasting restrictions to tackle a second wave of coronavirus infections that threaten to derail a fragile recovery in economic activity.

A weaker pound and a raft of stimulus measures have helped the FTSE 100 bounce back from its coronavirus-driven slump in March, however an increase in COVID-19 cases coupled with the UK's economic weakness has kept investor optimism in check.

"The lower pound has had a mechanical effect on the FTSE 100 with investors buying in on Monday's dips adding support, (while) the larger sentiment continues to be of caution towards UK markets with the Brexit and rising coronavirus cases being an overhang," said Chris Bailey, a strategist at Raymond James.

The mid-cap index .FTMC rose 1.6% with healthcare sector stocks .FTNMX4350 leading gains.

Britain's finance minister is not minded to extend a furlough scheme that is currently scheduled to stop at the end of October, his colleague Dominic Raab, foreign minister, said.

Beauty products maker PZ Cussons Plc PZC.L fell 7.3% despite posting a 23% rise in first-quarter revenue on higher sales of hand wash, sanitiser gels and soaps.

SSP Group SSPG.L, the owner of Upper Crust and Caffe Ritazza, rose 10.7% after pointing to an improvement in weekly sales even as it forecast an 86% drop in second-half sales due to the pandemic.

(Reporting by Shashank Nayar in Bengaluru; Editing by Saumyadeb Chakrabarty and Subhranshu Sahu)

((Shashank.Nayar@thomsonreuters.com; within U.S. +1 646 223 8780; outside U.S. +91 80 6182 2256;))

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.


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