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FTSE retreats on Franco-German euro spat
by Gavin Lumsden on Feb 06, 2013 at 14:43
After a morning rally the FTSE 100 fell back below the 6,300 mark as the US market appeared poised to open lower and disagreement between France and Germany over the strength of the euro discouraged investors.
The FTSE 100 traded 13 points or 0.2% lower at 6,269 while the futures market pointed to the Dow Jones industrial average falling 51 points or 0.4% to 13,859 when Wall Street opens shortly.
In Europe the FTSE Eurofirst 300 index fell 0.5% or 5.7 points to 1,148 and the euro slid the same amount to $1.3519 against the dollar. There was caution towards the single currency ahead of tomorrow's meeting by the European Central Bank while the spat between Germany and France also weighed on sentiment. Earlier a spokesman for Germany's chancellor Angela Merkel said the recent strength of the euro was not a problem, contradicting fears expressed by French prime minister Francois Hollande that it would restrict exports from the eurozone.
On currency markets the yen fell close to a three-year low of 94.075 to the dollar on expectations that the next governor of the Bank of Japan will step up measures to drive down the currency in a bid to boost exports and raise inflation.
The pound weakened slightly against the dollar to $1.5647.
Gold recovered earlier losses to trade 0.1% higher at $1,674.60 an ounce.
Falkland Oil & Gas (FOGL.L) shed half a penny or 1.5% after Argentina threatened to continue legal action against oil exploration companies active in the disputed waters around the islands. Rivals Rockhopper Exploration (RKH.L) and Borders & Southern Petroleum (BSTH.L) added 2.25p to 159.5p and 0.5p to 27.6 respectively.
GlaxoSmithKline (GSK.L) dipped 4p or 0.3% to £14.38 after the drugs giant and Citywire Top Stock favourite failed to deliver a significant improvement in sales and margins in its full-year results. It is restructuring its European operations with the aim of saving £1 billion a year and has placed its Lucozade and Ribena brands under a strategic review.
Hargreaves Lansdown (HRGV.L) extended its lead to nearly 9% or 65p at 799.6p after the investment 'supermarket' impressed with a 30% leap in half-year profits.
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