Ftse 100 retreats as pound surges

London’s top shares had dropped 0.2%, losing 15.73 points and ending the day at 7,369.44

The FTSE 100 gave back some of its Monday gains as the index was weighed on by a strong performance from the pound on Tuesday.

By the end of the day London’s top shares had dropped 0.2%, losing 15.73 points and ending the day at 7,369.44.

Sterling rallied to a three-month high, trading up 1.1% to around 1.19 dollars by the time markets closed in London.

It came as US producer inflation figures (PPI) came in below expectations on Tuesday, and the markets look forward to the Chancellor’s autumn statement on Thursday.

European markets have seen another positive session, although the FTSE 100 has slipped back, failing again to hold above the 7,400 level, with the rise in the pound post US PPI appearing to act as a bit of a drag on the UK index, said Michael Hewson, an analyst at CMC Markets.

The day after soaring to the top of the FTSE, online supermarket Ocado was bookmarking the index at the other end, dropping around 17% on the day.

It was unclear what had moved the company’s shares so much both days, however The Times published a story on Tuesday morning questioning the company’s valuation.

The business has seen its shares soar over the past two weeks after it announced a deal with a South Korean retail giant.

Vodafone was also a major drag. The business reported a set of “lacklustre” figures, according to Hewson.

(Vodafone has) been a serial underperformer since the company disposed of its Verizon stake all the way back in 2014, falling year over year, and have shown little sign of mounting any sort of recovery, the analyst said.

Earlier this year there was a largely indifferent response to the company’s Q1 numbers, and today’s first-half numbers appear to be similarly lacklustre, the shares falling back after the telecoms giant reported a 2% rise in revenues to 22.9 billion euros (£20 billion), helping to boost operating profits by 12% to 2.9 billion euros, with a decent performance in the UK business offsetting weakness in Italy and Spain, he said.

The FTSE’s performance lagged behind its European peers, with Germany’s Dax and France’s Cac 40 both gaining half a per cent.