London's top flight index appeared to shrug off the loss of the UK's AAA credit rating yesterday, with subdued trading across the Atlantic proving a greater concern to investors.
The FTSE 100 Index reached five year highs during the day, but lost early gains ahead of US Federal Reserve chairman Ben Bernanke's testimony to the Senate Banking Committee today.
The FTSE 100 closed up 19.7 points at 6355.4, while on Wall Street the Dow Jones Industrial Average opened flat in anticipation of an update on the Fed's asset purchase plans.
The overseas dominance of the FTSE 100, with an estimated 70% of earnings derived from outside the UK, ensured the Moody's downgrade prior to the weekend did not impact on the mood of London equities.
But on currency markets the pound weakened during overnight trading in Asia, leaving it at a 31-month low against the US dollar at 1.51 and at a 16-month low against the resurgent euro. Sterling was 1.15 against the euro as traders were encouraged by early poll indications the Italian election was set to be won by Pier Luigi Bersani of the centre left, the main competitor to the centre-right party led by Silvio Berlusconi.
Joshua Mahony, research analyst at Alpari, said: "Markets had feared that a move to appoint the controversial ex-president would set back not only Italy's chances of pulling out of it's current downturn, but would also dent hopes of a relatively swift exit from the depression seen across the eurozone."
Publisher Pearson topped the FTSE 100 fallers board today with a 4% drop in its share price after it warned of job cuts under a restructuring that will focus its education arm on fast-growing and digital markets.
Shares fell 45p to 1171p as the company, which is preparing to integrate its Penguin books arm with Random House, said operating profits were 1% higher at £936 million last year.
Associated British Foods shares were also lower despite impressive sales from its Primark retail chain.
Marks & Spencer shares also fell 9.7p to 367.9p after leaked industry figures over the weekend showed it continued to lose market share in fashion.
The biggest FTSE 100 risers were Antofagasta up 33p to 1117p, Royal Bank of Scotland ahead 9.8p to 354.8p, RSA 3.1p higher at 120.7p and Glencore International up 8.4p to 382p.
The biggest FTSE 100 fallers were Pearson down 45p to 1171p, Reckitt Benckiser off 135p to 4381p, Whitbread 69p lower at 2563p and Marks and Spencer down 9.7p to 367.9p.
Why are you making commenting on The Herald only available to subscribers?
It should have been a safe space for informed debate, somewhere for readers to discuss issues around the biggest stories of the day, but all too often the below the line comments on most websites have become bogged down by off-topic discussions and abuse.
heraldscotland.com is tackling this problem by allowing only subscribers to comment.
We are doing this to improve the experience for our loyal readers and we believe it will reduce the ability of trolls and troublemakers, who occasionally find their way onto our site, to abuse our journalists and readers. We also hope it will help the comments section fulfil its promise as a part of Scotland's conversation with itself.
We are lucky at The Herald. We are read by an informed, educated readership who can add their knowledge and insights to our stories.
That is invaluable.
We are making the subscriber-only change to support our valued readers, who tell us they don't want the site cluttered up with irrelevant comments, untruths and abuse.
In the past, the journalist’s job was to collect and distribute information to the audience. Technology means that readers can shape a discussion. We look forward to hearing from you on heraldscotland.com
Comments & Moderation
Readers’ comments: You are personally liable for the content of any comments you upload to this website, so please act responsibly. We do not pre-moderate or monitor readers’ comments appearing on our websites, but we do post-moderate in response to complaints we receive or otherwise when a potential problem comes to our attention. You can make a complaint by using the ‘report this post’ link . We may then apply our discretion under the user terms to amend or delete comments.
Post moderation is undertaken full-time 9am-6pm on weekdays, and on a part-time basis outwith those hours.
Read the rules hereComments are closed on this article