London close: FTSE closes lower as pound firms against dollar on Trump fears
By Renae Dyer
Date: Monday 23 Jan 2017
(ShareCast News) - The FTSE 100 closed in the red on Monday as the pound gained against the dollar amid uncertainty about US President Donald Trump's policies.
The index fell 0.66% to 7,151.18 points.
The pound jumped 0.82% versus the dollar to $1.2476 as the greenback was under pressure on worries about Trump's administration, which has been marred by the new President's protectionist inauguration speech on Friday and protests against the leader.
Markets were also uneasy after Trump on Sunday said he would start withdrawing from the Trans-Pacific Partnership and renegotiating the North American Free Trade Agreement. Meanwhile, the former property tycoon will host Prime Minister Theresa May on Friday to discuss a trade deal once Britain leaves the EU.
In the first weekday of his White House residency, Trump told business leaders that his government plans to "massively" cut taxes and regulations, but impose a "very major border tax" on firms that move factories overseas.
"Trump's promise for massive import taxes on products produced abroad and shipped to the US strikes a dangerous tone, threatening to spark a trade war, hard on the heels of the currency wars of the past few years," said IG market analyst Joshua Mahony.
"If today teaches us anything, it is that Trump shows little signs of slowing down, with the next four years promising to be hugely unpredictable for traders who deal with US securities."
Banking shares were the biggest fallers on the FTSE after Trump's inauguration speech sent yields lower and after a survey showed optimism among the UK's lenders and money managers fell for the fourth consecutive quarter.
The survey of 103 financial services firms by business group CBI and accounting firm PwC revealed the longest period of falling business sentiment since the worst days of the 2008 financial crisis. It found that nine out of 10 cited Brexit as their main challenge.
Shares in Royal Bank of Scotland, Barclays, Lloyds Banking Group and HSBC Holdings were under the cosh.
On the upside, mining shares were higher as the weaker dollar gave gold prices a boost. Antofagasta, Fresnillo and Anglo American rallied.
Antofagasta was also lifted by Citigroup upgrading the stock to 'buy' from 'neutral' at a target price of 807p, saying the miner is set to benefit from lower taxes and sees improved free cash flow in the next decade.
Elsewhere, Paddy Power Betfair slumped after saying it would not hit its top-end targets after Trump's unexpected US election win and many punter-friendly sporting results at the end of the year cost it around £40m.
Essentra declined after the maker of cigarette filters and plastic packaging warned that it expects profit will be below expectations due to operational issues at its health and personal care packaging unit.
Hochschild Mining was on the front foot as it reached an agreement with a local community at its Pallancata mine in Peru to allow the silver and gold mine to reopen this week.
Housebuilder Bovis Homes gained following a Sunday Times report that one of its larger shareholders has suggested Berkeley Group may mount a bid for the company.
SSP Group was up on the back of a Jefferies upgrade to 'buy' on the food and drink concession operator's "sizzling solid potential".
Market Movers
FTSE 100 (UKX) 7,151.18 -0.66%
FTSE 250 (MCX) 18,116.03 -0.19%
techMARK (TASX) 3,307.65 -1.07%
FTSE 100 - Risers
Antofagasta (ANTO) 789.50p 3.61%
Fresnillo (FRES) 1,450.00p 3.42%
easyJet (EZJ) 1,076.00p 3.07%
Capita (CPI) 522.00p 1.66%
London Stock Exchange Group (LSE) 3,097.00p 1.57%
Land Securities Group (LAND) 999.50p 1.52%
Anglo American (AAL) 1,308.50p 1.47%
Randgold Resources Ltd. (RRS) 6,810.00p 1.41%
TUI AG Reg Shs (DI) (TUI) 1,145.00p 1.15%
British Land Company (BLND) 597.00p 1.10%
FTSE 100 - Fallers
Paddy Power Betfair (PPB) 8,295.00p -4.38%
Dixons Carphone (DC.) 336.10p -2.58%
Royal Bank of Scotland Group (RBS) 215.90p -2.26%
BP (BP.) 487.15p -2.25%
Sage Group (SGE) 631.00p -1.94%
Micro Focus International (MCRO) 2,083.00p -1.75%
Tesco (TSCO) 195.00p -1.66%
Shire Plc (SHP) 4,320.00p -1.66%
Barratt Developments (BDEV) 486.40p -1.66%
Carnival (CCL) 4,105.00p -1.51%
FTSE 250 - Risers
Hochschild Mining (HOC) 253.40p 12.22%
Ferrexpo (FXPO) 136.40p 5.00%
SSP Group (SSPG) 409.50p 4.73%
Kaz Minerals (KAZ) 423.30p 3.17%
Bovis Homes Group (BVS) 820.50p 2.95%
Safestore Holdings (SAFE) 368.80p 2.45%
AO World (AO.) 162.20p 2.27%
Phoenix Group Holdings (DI) (PHNX) 738.50p 2.14%
Acacia Mining (ACA) 421.50p 2.11%
Vedanta Resources (VED) 1,015.00p 2.01%
FTSE 250 - Fallers
Hunting (HTG) 587.50p -4.86%
Pets at Home Group (PETS) 195.60p -4.68%
Amec Foster Wheeler (AMFW) 458.10p -3.56%
CMC Markets (CMCX) 117.80p -2.89%
Inmarsat (ISAT) 638.50p -2.67%
Greencore Group (GNC) 230.10p -2.50%
Petra Diamonds Ltd.(DI) (PDL) 153.20p -2.30%
Henderson Group (HGG) 234.40p -2.17%
Virgin Money Holdings (UK) (VM.) 298.40p -2.16%
Dairy Crest Group (DCG) 602.50p -2.11%
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