Markets

Sterling falls to eight-year low amid continuing Brexit uncertainty

Sales at struggling retailer Game Digital are expected to fall 5 per cent this year amid challenging high street trading, but the firm is ramping up its presence in rapidly growing e-sports markets Picture by John Nguyen/PA
Ben Woods

STERLING has slumped to an eight-year low against the euro, as Brexit uncertainty and strong economic data from the Eurozone hit the UK currency.

The pound was down 0.5 per cent to 1.083 versus the euro as the London market closed, hitting its lowest level since October 2009.

An rosy update on the Eurozone economy gave the euro a leg-up against its peers, with PMI figures showing manufacturing export orders climbed at their fastest pace for six-and-a-half years.

The pound was also struggling against the US dollar, down 0.2 per cent at 1.278.

On the equity markets, the FTSE 100 Index edged up by 0.91 to 7,382.65, as a fall from advertising giant WPP was countered by a jump from supermarket group Tesco.

Across Europe, the Cac 40 in France dropped by 0.3 per cent and Germany's Dax was 0.5 per cent lower.

Brent crude endured a choppy session, rebounding from falls to rise by one per cent at US$52.41 a barrel.

Concerns over strengthening output in Libya and oversupply in the market faded during the session.

In UK stocks, shares in WPP closed down just shy of 11 per cent, or 174p to 1,420p, as the group cut its full-year revenue forecasts amid slowing demand from consumer goods firms.

The advertising giant predicts full-year like-for-like revenue and net sales will come in between zero and one per cent growth. It had previously pencilled in 2 per cent growth.

In a contrast of fortunes, Tesco pushed 1.5 per cent higher, up 2.9p to 187.1p, after the supermarket launched a compensation scheme for investors impacted by the 2014 accounting scandal.

The Financial Conduct Authority (FCA) said in March that Tesco had committed market abuse when it overstated profits by £263 million in a trading update on August 29 2014.

It concluded that Tesco's share price was inflated as a result, meaning investors had paid a higher price and were entitled to claim compensation if they bought shares and bonds between August 29 and September 19 2014.

The financial regulator said each net buyer of shares over the period would be entitled to 24.5p per share purchased, alongside interest of 1.25 per cent a year if the buyer is an institutional investor and 4 per cent a year if the buyer is a retail investor.

The London market was also lifted by Provident Financial, which saw shares bounce back after crashing on Tuesday.

The subprime lender was the biggest riser on the FTSE 100 Index – up 12 per cent, or 71.5p to 661p - after plunging more than 66 per cent in the previous session when it warned over heavy losses following a period of "substantial under-performance" and announced chief executive Peter Crook was stepping down.

Away from the top tier, shares in struggling retailer Game Digital rocketed after investors warmed to plans that will see the firm ramp up its presence in rapidly growing e-sports markets.

Game rose 35 per cent, or 8.6p to 33.3p, after saying it would aim to tap the "significant potential" of the group's e-sports activities, where professional gamers battle it out in front of crowds at events such as Insomnia.

The biggest risers of FTSE 100 Index were Provident Financial up 71.5p to 661p, Antofagasta up 22.5p to 996p, Rio Tinto up 75.5p to 3,615p, Tesco up 2.9p to 187.1p.

The biggest fallers were WPP down 174p to 1,420p, Paddy Power Betfair down 195p to 7,000p, ITV down 3.1p to 162.6p, easyJet down 23p to 1,270p.

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