Markets: Pound suffering more than equities

By PETER RANSCOMBE
Published on 25/07/2012 21:23

THE pound dropped against all the major currencies today after Britain’s economic output dropped by much more than analysts had predicted.

The UK’s gross domestic product (GDP) plunged by 0.7 per cent in the three months to 30 June, causing sterling to slide and increasing the chances of further money printing by the Bank of England.

Having recently set a four-year high against the euro, the pound dropped by just under 1 per cent to €1.27 and fell to just under $1.55 against the dollar. But equities shrugged off the fall in GDP, with the FTSE 100 edging down just 0.91 points to 5,498.32, having stayed in positive territory for much of the session.

The FTSE 250 index – often more attuned to the UK economy – had a tougher day, closing down 13 points at 10,873.

Chip designer ARM Holdings, which makes components for smartphones and tablet computers, jumped to the top of the Footsie after reporting a bigger-than-expected 23 per cent rise in second-quarter profits.

The strong results offset any disappointment from ARM customer Apple, which revealed lower-than-expected revenues and net income growth on Tuesday. Shares in ARM jumped 9 per cent or 41.7p to 526.5p.

At the other end of the scale, Scottish Hydro Electric-owner SSE fell 5.1 per cent or 70p to 1,294p as it turned ex-dividend, meaning investors buying the stock now won’t be entitled to the next divi.

Livingston-based gas meter supplier Energy Assets closed up 4p at 178p as its annual report revealed chief executive Philip Bellamy-Lee took home £220,409 in pay and bonuses during a year that saw the firm join the Alternative Investment Market.

NEW YORK: The S&P 500 fell for a fourth day tonight and the Nasdaq dropped after a rare earnings stumble from Apple, while strong results from Boeing and Caterpillar lifted the Dow.

The Dow Jones industrial average rose 58.73 points, or 0.47 per cent, to end at 12,676.05 but the Standard & Poor’s 500 Index dipped just 0.42 of a point, or 0.03 per cent, to finish at 1,337.89. The Nasdaq Composite Index slipped 8.75 points, or 0.31 per cent, to close at 2,854.24.