LONDON — The FTSE 100 hit a record high on Thursday, boosted by the weaker pound on the day.
Britain’s benchmark share index ended the day at an all-time closing peak of 7,558 points, up 0.32% from the day’s open, to push it into uncharted territory.
Sterling dropped sharply earlier in the day after the EU’s chief Brexit negotiator Michel Barnier said talks between Britain and the bloc have reached a “deadlock.”
Appearing at a press conference in Brussels, Barnier said that the lack of progress in talks was “very disturbing.”
“We’ve reached a state of deadlock, which is very disturbing. We are not asking the UK to make concessions,” he said.
Generally speaking, when the pound goes down, the FTSE rises. That is because it is contains miners, oil firms, and pharmaceutical giants, with 70% of all revenues for companies on the index derived from abroad, meaning a weak pound makes them more profitable.
Here’s the chart:
“The UK stock market continues its winning streak despite concerns over economic performance and the unfolding Brexit process. The question is whether the market’s strong run means it’s fit to burst,” Laith Khalaf, senior analyst at Hargreaves Lansdown said in an email.
“To that end, it’s vital to recognise that the level of the Footsie is not a measure of the value in UK stocks, seeing as it doesn’t take account of the level of earnings of companies in the index.”