Europe: FTSE 100 breaches 8,000 to hit new high as pound declines

BRITAIN’S FTSE 100 briefly cleared 8,000 points to hit a fresh record high on Wednesday, helped by a drop in the pound after data showed domestic inflation eased more than expected.

The export-oriented FTSE 100 closed 0.6 per cent higher at 7,997.83 points, after hitting 8,003.65 earlier in the session.

The pound fell after data showed British consumer price inflation (CPI) fell more than expected in January and there were also drops in underlying measures of inflation that are being closely watched by the Bank of England.

“We have managed to post another record high above 8,000, as a combination of a sharp decline in headline January CPI and a weaker pound has helped to boost consumer discretionary (stocks),” said Michael Hewson, chief market analyst, CMC Markets UK.

The personal goods and travel stocks sub indexes rose 2.7 per cent and 2.0 per cent respectively. The FTSE 100 has had a stellar start to the year, rising more than 7 per cent, boosted by upbeat corporate earnings. The more domestically-focussed FTSE 250 midcap ended the session 0.8 per cent higher. A laggard was British lender Barclays, slumping 7.9 per cent to the bottom of the FTSE 100 and posting its biggest drop in nearly a year on a slump in full-year profit. “Barclays has bitterly disappointed the market with its full-year numbers. Profits have been stunted partly because of a big increase in litigation costs relating to the over-issuance of US securities,” said Sophie Lund-Yates, lead equity analyst at Hargreaves Lansdown. The FTSE 350 banking index fell 1.2 per cent. Glencore announced a payout of US$7.1 billion to its investors as the metal miner posted a record annual profit. However, its shares fell 1.6 per cent against weaker copper and aluminium prices and as the company warned that rising costs of producing minerals could dent future earnings. REUTERS