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FTSE 100 records worst session in 3 weeks on stronger pound

Stock MarketsSep 09, 2021 16:55
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© Reuters. FILE PHOTO: A man shelters under an umbrella as he walks past the London Stock Exchange in London, Britain, August 24, 2015. REUTERS/Suzanne Plunkett/File Photo

By Devik Jain and Amal S

(Reuters) -Britain's export-heavy FTSE 100 ended lower on Thursday weighed by a strengthening pound and concerns over slowing economic growth, while easyJet (LON:EZJ)'s share sale plan sent the British airline to the bottom of the mid-cap index.

The blue-chip index ended down 1.0%, recording its worst session in three weeks with consumer staple and pharmaceutical stocks weighing the most.

The domestically focused mid-cap FTSE 250 index fell 0.2%.

The FTSE 100, which jumped around 26% from October lows, is on course to end the week in the red as the rising spread of the Delta variant of coronavirus and supply chain issues raised worries of a slowdown in economic recovery.

"One thing investors hate is tax and taxing a market full of dividend darlings is a body blow for sentiment," said Keith Temperton, sales trader at Forte Securities.

"I think that's the overriding reason for stocks being lower today and that will be a driver for the performance going forward as well."

Earlier this week, British Prime Minister Boris Johnson set out plans to raise taxes on shareholder dividends to try to fix a health and social care funding crisis.

Dollar-earning consumer staples stocks, including Unilever (LON:ULVR), British American Tobacco (LON:BATS) and Imperial Brands (LON:IMB), shed between 1.4% and 1.6% on a stronger pound.

"And a big negative there is also a pretty strong pound," Temperton said.

Meanwhile, the European Central Bank signalled it will only slightly reduce its emergency bond purchases over the coming quarter.

easyJet fell 10.2% after the British airline said it rejected a takeover offer and would raise $1.7 billion from shareholders to fund its pandemic recovery and expand operations.

Genus (LON:GNS) slid 7.6% as Peel Hunt downgraded the livestock genetics firm's stock to "hold" from "buy" after it missed annual profit estimates.

FTSE 100 records worst session in 3 weeks on stronger pound
 

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