The FTSE 100 has been met with some fairly strong selling this morning after popping to its highest level in almost a month shortly after the open. The index has since shred 30 points, with the rise in the pound threatening to put a halt to the recent run higher.
Pound gains as US dollar pulls back
Sterling has moved back above the 1.25 level against the US dollar this morning as the buck has come under some selling pressure following its recent appreciation. The market-implied probability of a rate hike from the Fed has risen in recent days, with a notably more hawkish Yellen and a substantial increase in the latest inflation figures both seeing traders become more open to the idea of another rise in the interest rate at the next policy meeting. Despite this the buck has softened and given a de facto boost to the pound in an unexpected move that has left many searching for an explanation, with profit-taking after recent gains being touted as a possible reason.
Airline stocks set for take off?
International Consolidated Airlines, the parent group of British Airways, is the best performing stock on the FTSE 100 this morning with a series of broker upgrades the most plausible explanation for the rise. The stock has now recovered the vast majority of the post-Brexit declines and is looking for a less turbulent time ahead. Airlines around the globe could be set to see a take-off in their stock prices with news yesterday that Warren Buffet had increased his holdings in the four biggest US airlines sevenfold. Shares in easyJet (LON:EZJ) are also gaining altitude on the move in, but in contrast to International Consolidated Airlines the budget carrier remains close to its post-Brexit lows.
FTSE to follow US counterparts to record highs?
Despite the early weakness in the leading UK stock benchmark this morning, the FTSE 100 remains within striking distance of all-time highs. The index has enjoyed a rise higher on the back of its US equivalents, with all three major stock markets across the pond posting yet another day of records on Wednesday. A look at the biggest fallers in London this morning appears as if the leading index has been arranged in reverse alphabetical order with AstraZeneca, Anglo American (LON:AAL) and Antofagasta (LON:ANTO) Holdings the three worst performing stocks. Rolls Royce (LON:RR) has posted a fresh weekly low as the manufacturing firm continues to see weakness following the reporting of a record loss earlier in the week.