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UPDATE 2-FTSE 100 edges lower as stronger pound offsets gains in miners

05/10/2021 04:34
UPDATE 2-FTSE 100 edges lower as stronger pound offsets gains in miners

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GBP/USD trades above 1.41 for first time since Feb 25

Greggs jumps on raising profit outlook after trading recovers

Provident falls on potential costs related to unit exit

FTSE 100 down 0.1%, FTSE 250 down 0.3%

Updates to market close

By Shivani Kumaresan and Devik Jain

- London's FTSE 100 dipped on Monday as weakness in industrial stocks and a stronger pound following the outcome of the Scottish election outweighed gains in miners.

The exporter-heavy index .FTSE dipped 0.1%, with large dollar-earning consumer staples companies, including Diageo DGE.L, British American Tobacco BATS.L and Relx Plc REL.L slipping between 0.7% and 2.3% as the pound strengthened.

The pound climbed to as high as $1.4158, its strongest in more than two months. GBP=

Miners, including Glencore GLEN.L, BHP Group BHPB.L and Rio Tinto RIO.L, provided the biggest boost as copper prices touched record highs on expectations of improved demand amid tightening supply. MET/L

"Despite the fact that the stocks have performed well, they are going to struggle if the yields start rising again. The market will be under the whim of currency and the bond market," Keith Temperton, equity sales trader at Forte Securities, said.

He added British investors would focus on Tuesday's Queen's Speech when the government lays out its priorities.

British Prime Minister Boris Johnson on Monday set out the next phase of lockdown-easing in England, giving the green light to "cautious hugging" and allowing pubs to serve customers pints inside after months of strict measures. nL8N2MX153

Britain has allowed international travel to resume from May 17, but just 12 countries and territories made the "green list", meaning they don't require quaratine. nL1N2MU16F

Ryanair Holdings RYA.L, British Airways-owner IAG ICAG.L, Wizz Air WIZZ.L and easyJet EZJ.L fell between 1.2% and 2.5%.

The domestically-focussed mid-cap FTSE 250 index .FTMC was down 0.3%. Bakery and fast food chain Greggs GRG.L surged 10.5% to the top of the index after raising its profit outlook. nL8N2MX14L

However, Provident Financial PFG.L slipped 2.5% after the sub-prime lender said it expected costs of up to 100 million pounds ($140.61 million) related to the closure of its doorstep-lending division. nL4N2MX1HW


(Reporting by Shivani Kumaresan and Devik Jain in Bengaluru; Editing by Subhranshu Sahu and Barbara Lewis)

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