London’s top flight index appeared to shrug off the loss of the UK’s AAA credit today, with subdued trading across the Atlantic proving a greater concern to investors.
The FTSE 100 Index reached five year highs during the day, but lost early gains ahead of US Federal Reserve chairman Ben Bernanke’s testimony to the Senate Banking Committee tomorrow.
The FTSE 100 closed up 19.7 points at 6355.4, while on Wall Street the Dow Jones Industrial Average opened flat in anticipation of an update on the Fed’s asset purchase plans.
The overseas dominance of the FTSE 100, with an estimated 70% of earnings derived from outside the UK, ensured the Moody’s downgrade prior to the weekend did not have an impact on the mood of London equities.
But on currency markets the pound weakened during overnight trading in Asia, leaving it at a 31-month low against the US dollar at 1.51 and at a 16-month low against the resurgent euro.
Sterling was 1.15 against the euro as traders were encouraged by early poll indications the Italian election was set to be won by Pier Luigi Bersani of the centre left - the main competitor to the centre-right party led by Silvio Berlusconi.
Joshua Mahony, research analyst at Alpari, said: "Markets had feared that a move to appoint the controversial ex-president would set back not only Italy’s chances of pulling out of it’s current downturn, but would also dent hopes of a relatively swift exit from the depression seen across the eurozone."
The biggest FTSE 100 risers were Antofagasta up 33p to 1117p, Royal Bank of Scotland ahead 9.8p to 354.8p, RSA 3.1p higher at 120.7p and Glencore International up 8.4p to 382p.
The biggest FTSE 100 fallers were Pearson down 45p to 1171p, Reckitt Benckiser off 135p to 4381p, Whitbread 69p lower at 2563p and Marks and Spencer down 9.7p to 367.9p.
