AAA loss hits sterling but FTSE rises
THE loss of Britain’s triple-A credit rating took its toll on the pound yesterday, which slumped to its lowest level for more than two years against the euro and dollar, while the Italian election weighed on the Footsie.
Gilts, or government bonds, were also initally hit by the downgrade but soon recovered, while the FTSE 100 index climbed higher, having already priced-in a downgrade following a warning from ratings agency Moody’s last year.
The Footsie ended the day up 19.67 points at 6,355.37, having hit 6,390.09 earlier in the session before falling during the afternoon session after exit polls suggested Silvio Berlusconi could be returning to power in Italy.
Johnny Keaney, a sales trader at Knight Capital, said: “The story of the afternoon is a sell-off after the numbers showed Berlusconi is doing well, and that’s taken the gloss off of what was a very strong day up to that point.”
Household goods and medicines maker Reckitt Benckiser dragged the top-flight down after the US Food & Drug Administration gave the green light for two firms to make generic versions of one of its drugs. Reckitt fell 135p to 4,381p.
Royal Bank of Scotland rose, up 9.8p at 354.8p, after it emerged over the weekend that the lender is considering a partial flotation of its Citizens Bank business in the US.
Shares in Trap Oil, the Aim-quoted explorer that bought Reach Oil & Gas in 2011, climbed as high as 14.25p before closing flat at 14p after its partner, Dana Petroleum, began drilling the Magnolia well in the North Sea.
Aberdeen transport firm FirstGroup edged up 4.9p to 190.9p after the Office of Fair Trading said it won’t refer to sale of its Wigan business to Perth-based rival Stagecoach, which closed down 0.5p at 296.7p.
NEW YORK: The The Standard & Poor’s 500 Index suffered its worst decline since 7 November last night in a sharp reversal from initial gains as the Italian elections stoked concerns that a divided parliament could disrupt the eurozone’s stability.
The Dow Jones industrial average slid 216.40 points, or 1.55 per cent, to end at 13,784.17 while the broader S&P 500 dropped 27.75 points, or 1.83 per cent, to finish at 1,487.85. The Nasdaq Composite Index lost 45.57 points, or 1.44 per cent, to close at 3,116.25.
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Weather for Edinburgh
Wednesday 19 June 2013
Temperature: 8 C to 19 C
Wind Speed: 20 mph
Wind direction: West
Temperature: 11 C to 19 C
Wind Speed: 7 mph
Wind direction: North