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FTSE recovers and pound gains from Trump slump

The FTSE 100 was on track for fourth week of gains after yesterday's bout of Trump nerves. Sterling was strong against weaker dollar.

 
FTSE recovers and pound gains from Trump slump

The FTSE 100 shrugged off a strong pound to rise 34 points, or 0.5%, to 7,471, clawing back some of yesterday's losses and on track for its fourth week of gains.

Yesterday's strong retail sales figures continued to buoy the UK stock market while in the US Wall Street opened higher as some of the political uncertainty that has dogged the Trump presidency this week receded.

Approaching close in London, the S&P 500 had risen 0.7% to 2,383 while a similar move left the technology-laden Nasdaq on 5,666.

Marco Pirondini, head of US equities at Pioneer Investments, believed the bull market was still intact although he said there were risks that the Justice Department investigation into Trump's ties to Russia could emasculate his administration.

'Short-term, US equities could decline further if the Trump administration is unable to deliver on tax reform, deregulation and infrastructure spending as promised. However, we believe the underlying fundamentals of the markets remain strong as evidenced by double-digit earnings growth in the first quarter of this year, low interest rates and ample liquidity in the banking system,' he said.

The pound has gained ground against a faltering dollar on track for its worst week since July, as the allegations against Trump continue to weigh on the currency.

Sterling regained a foothold above $1.30, up 0.6% on the day at $1.302, clawing back ground lost in yesterday's recovery rally for the dollar and US markets.

The dollar has now given up all the gains made since Donald Trump's shock election as president in November.

Paresh Upadhyaya, director of currency strategy at fund group Pioneer Investments, said this week's fall for the dollar was an acceleration of a trend that had been building since the turn of the year.

'The currency markets were the first asset class to dial back expectations of full passage of Trump's economic agenda since mid-January,' he said.

'The failure to repeal and replace Obamacare in the first pass triggered downside expectations of lower corporate and personal income tax cuts. The political woes of late accelerated declining expectations of Trump reforms.'

1 comment so far. Why not have your say?

SDRL

May 19, 2017 at 19:05

This is a Trump rally. Yesterday you folks said to sell all your stocks and I said it was a buying opportunity.

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