The FTSE 100 is higher by around 15 points this morning as the market goes in search of a record high weekly close. The leading UK stock benchmark has enjoyed a rally in recent weeks following the positive outcome of the French elections and received a further boon yesterday as the pound pulled back off recent highs following the Bank of England meeting. The pound is lower across the board this morning and closed below the 1.29 handle against the US dollar for the first time this week last night.
Stocks look to end the week on the front foot
A couple of the best performing blue-chip stocks in London this morning are pharmaceuticals with AstraZeneca (LON:AZN) higher by more than 4%. The drug company has seen a pop higher in its stock after announcing a successful trial of one of its lung cancer drugs. GlaxoSmithKline (LON:GSK) is also gaining with International Consolidated Airlines (LON:ICAG), Standard Life (LON:SL) and Shire (LON:SHP) making up the top five positions on the FTSE 100. It’s not all good news for the pharmaceutical sector though with Hikma Pharmaceuticals (LON:HIK) languishing at the foot of the index and lower by almost 2%. It’s been a testing week for investors in Hikma, which has lost almost a tenth of its market value over the past five days following the rejection of an asthma drug by US regulators.
Scrutiny grows on Trump
The latest political drama from the US took an unexpected turn yesterday when President Trump announced that the decision to fire FBI Director James Comey was not based on a memo from deputy attorney general Rod Rosenstein on Mr. Comey’s mishandling of the investigation into Hillary Clinton’s emails - which contradicts the statement given by the White House press department at the time the news broke.
Press secretary Sean Spicer claimed that it was a memo from Rosenstein that had prompted Trump to remove Comey and this position had been backed by vice-president Mike Pence on Wednesday.
Trump’s comments yesterday that “this Russia thing” was part of the reasoning will serve only to add fuel to the fire of conspiracy theorists who believe that the president is attempting a cover up. The inability to project a consistent message from the White House should also be seen as a cause for alarm and raises serious questions about the lines of communication between the president and his staff.
Gold bugs bite back?
Markets have not seen much of a reaction to this news yet but there are a few signs of caution around with the price of gold moving back towards 1230 and reversing most of the declines seen earlier this week. This story is likely to wrangle on for some time but more pressingly from a trader’s perspective is the batch of economic data out from the US this afternoon which will likely be far more important for the price of bullion going into the weekend.
Retail sales figures and the Consumer Price Index (CPI) for April will be released at 13:30 BST and some higher than expected data could put paid to this recent rise in gold. Thursday saw the less widely followed Producer Price Index (PPI) rise sharply and more signs of an increasing inflationary environment this afternoon would add weight to the calls for another Fed rate hike in June and could boost the US dollar and weigh on precious metals.
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