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FTSE gives up 2017 gains as resurgent pound weighs

FTSE gives up 2017 gains as resurgent pound weighs

A resurgent pound has continued to weigh on the FTSE 100, wiping out the index's gains for the year as the looming snap general election sends sterling higher.

The UK blue-chip index edged nine points lower to 7,105, having yesterday closed at 7,123, below the point at which it started 2017. Since prime minister Theresa May's shock announcement on Tuesday she would seek a snap general election, the index has fallen 3%.

The index has been hurt by a resurgent pound, which has rallied from lows following the announcement. Up 0.5% at $1.284 today, sterling has risen more than 2.5% since Tuesday.

A stronger pound tends to hold back the FTSE 100, whose members rely on overseas markets for around three-quarters of their earnings.

'Blue-chips opened timidly as investors continued to consider the upcoming UK general election alongside wider geopolitical issues and the strong pound weighed on the index,' said Russ Mould, investment director at online stockbroker AJ Bell.

Richard Stone, chief executive of The Share Centre, said the pound's strength was a sign of investor confidence ahead of the election.

'The rise in sterling is predicated on the outcome being a stronger UK government, unshackled from some of the budgetary constraints of the previous Conservative manifesto and able to deliver a stronger UK economy,' he said.

On the FTSE 100, Unilever (ULVR) was the biggest riser, up 1.5% at £39.97 after reporting stronger-than-expected quarterly sales.

Ashtead (AHT) was the biggest faller, down 4.6% at £15.49, as the US-focused tool hire group was hit by poor results from rival United Rentals (URI.N).

Among 'mid cap' stocks, Go-Ahead (GOG) jumped 4.1% to £17.99 after the transport operator left full-year forecasts unchanged, confounding fears of further downgrades.

Debenhams (DEB) was the biggest FTSE 250 faller, down 5.4% at 52.3p after announcing spending plans to upgrade its mobile systems, supply chain and store estate following a strategic review.

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