UK's FTSE 100 rallies to set record intraday high as pound weakens

Share prices of FTSE 100 companies are displayed on a screen in the atrium of the London Stock Exchange Group Plc's offices on July 25, 2016.
Share prices of FTSE 100 companies are displayed on a screen in the atrium of the London Stock Exchange Group Plc's offices on July 25, 2016.PHOTO: BLOOMBERG

LONDON (REUTERS) - Britain's internationally-exposed FTSE 100 shares index rose to a record intraday high on Tuesday (Oct 11), helped by more weakness for sterling on currency markets.

The FTSE 100 rose as much as 0.5 per cent to a record intraday high of 7,129.83 points, before settling back a touch to stand 0.4 per cent higher by 1120 GMT (5.20pm Singapore time). Its previous record intraday high stood at 7,122.74 points set in April 2015.

In the US dollar terms, the FTSE 100 is still down 6 per cent this year.

The FTSE 250 mid-cap index, whose companies are more exposed to the domestic UK economy, rose 0.8 per cent and was also near that index's record high.

Sterling slid back below US$1.23 (S$1.68) as senior officials and investors pointed to the potential for more falls for a market still in shock after last Friday's 10-per cent flash crash, as concerns over Brexit continue to hit the pound.

However, that fall in sterling has given a boost to many of the FTSE 100's international companies which earn much of their revenues in US dollars, and therefore get a currency-related accounting lift as those dollars are converted back to pounds.

The FTSE 250's companies have partly benefited from recent upbeat data that has led many forecasters to drop predictions that the British economy will slip into recession this year.

Some analysts also expect the drop in the pound to make British mid-cap companies cheaper and more attractive for potential overseas acquirers.