FTSE 100 Slides & Pound Hits Fresh Low
The pound has continued to come under pressure as worries over the Brexit process persist. After hitting a 31-year low against the dollar on Tuesday, the pound fell further in early trade – hitting $1.2687 – before recovering slightly.
Sterling also fell to a five-year low against the euro, hitting €1.1308 at one point.
The FTSE 100 share index, which has risen sharply in the past couple of days, was also lower.
The benchmark index, which came close to hitting record high on Tuesday, fell 21.37 points to 7,052.97.
The pound has fallen sharply since the start of the week when Prime Minister Theresa May said she would begin the formal process to take the UK out of the EU by March next year.
Sterling has fallen on worries that the UK will be prepared to leave the EU single market as part of the Brexit process so that it can impose controls on immigration.
In general, the fall in the pound has boosted the FTSE 100 as many of the companies in the index generate most of their revenues abroad. A weaker pound means overseas revenues are worth more when they are converted back into sterling.
However, global equity markets were lower in general on Wednesday, following a report by Bloomberg that the European Central Bank might begin to slow the pace of its bond-buying programme.
The stand-out share movement in the FTSE 100 came from Tesco. Shares in the supermarket jumped 8% after it reported a third consecutive quarter of rising sales and announced plans to lift its profit margins.