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FTSE 100 stocks close at record high as sterling slips again

Published: 17:50 06 Jan 2017 GMT

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FTSE 100 stocks closed the week robustly, reversing initial losses to chalk a fresh record high on Friday – its seventh consecutive day – as further sterling falls benefited blue-chip companies.

The blue-chip ticker ended up 0.2% at 7,210.05 – a fresh intraday and closing high, mimicking the gains seen by the Nasdaq Composite to a fresh record high as London markets were closing.

But the factor which has led to a slew of record gains for the index was the fall in the pound against the dollar, as many of the firms are international and make their profits in dollars, including from units based in the United States.

The pound fell 0.8% against the US dollar to $1.2313.

The top gainers were BAE Systems plc (LON:BA.) up 3% to 605p and Lloyds Banking Group plc (LON:LLOY) up 1.9% to 65.9p.

BAE was the recipient of bullish views from brokers on Thursday. On Friday it was the turn of Lloyds as Barclays upgraded Lloyds Banking Group to 'overweight' from 'equalweight' and pushed the target price to 75p from 55p, saying returns are supported by the planned MBNA acquisition and an improved net interest margin outlook.

The mid-cap FTSE 250 index, less exposed to the benefits of a falling pound but expose positively to a weaker sterling versus the euro, also managed to rise, up 0.2% to 18,341 and led by brokerage TP ICAP plc (LON:TCAP) up 7.8% to 467.4p.

The interdealer, a merger of Tullett Prebon and ICAP, saw increased trading activity in the final quarter of 2016, largely due to the volatility in equity markets in the aftermath of the US presidential election, and expects an increase in revenue for the year.

The FTSE 250 company anticipates revenue for the year ended 31 December 2016 to be 12% higher than the £796m reported the previous year, with a 4% rise at constant exchange rates.

Sterling was down 0.4% against the euro to €1.1659.

Others to benefit from sterling/euro weakness include small-caps. The FTSE AIM 100 Index ended up 0.5% at 4,148 and the FTSE AIM All-Share Index was up 0.6% to 863.

Across the London bourse, 38% of stocks gained and 27% fell.

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