The FTSE 100 managed to pull back some of yesterday's losses thanks to a rally and an 11-month high in GlaxoSmithKline's share value and a weakening of sterling against the dollar, and all despite a 27% loss in Jarvis' share value.
The FTSE 100 index closed up just over 20 points or 0.5% to 4505.5 by close of business in London, as rumours of a potential rate rise in the US strengthened the dollar to its best position in a year against sterling.
It’s the large pharmaceutical firms such as GSK and AstraZeneca which have most to gain from an improvement in US sales, as the bulk of its profit originates in the US and financial reporting is conducted in US dollars.
The pound today weakened to $1.7798 having yesterday closed the day at $1.7898 against the pound, but this is a stark improvement to the $1.7764 to the pound which sterling fell to earlier.
Glaxo rose 48p or 4.3% to £11.62 on the back of improved potential returns in the US, alongside AstraZeneca which also gained 68p or 2.6% to £26.75.
Accounting software firm Sage also closed the day up 5.5p or 3.2% to 176.75p after revealing fiscal first-half profits are expected to rise 17% while GUS, the catalogue retail firm which also owns Argos, added 9p or 1.2% to 760p as its second-half revenue is expected to increase too.
Jarvis, the engineering company which has lost contracts recently and suffered huge fines for late completion of railway engineering work, eventually closed the day down at its lowest level for five years, having dropped 47.75p or 27% to 130p. Reports of yet more profit revisions downward have not been popular with shareholders.
In the US, talk of a potential rate rise has already knocked confidence on the New York Stock Exchange, with the Nasdaq Composite index worst hit.
The Dow Jones index is so far down a fraction to 10,372 while the S&P 500 index has lost 0.26% to 1,125 and the Nasdaq has already lost 23.35 points or 1.15% to 2,001.5.IFAonline
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