Market News & Analysis
FTSE drops on geopolitical tensions and a strong pound
Fiona Cincotta February 27, 2019 4:30 PM
Ocado higher, Marks lower; says it all
On the FTSE, Marks and Spencer fell to the bottom of the index dropping a massive 12.3% following the announcement of a tie up with Ocado at a price of £750 million. Whilst it is well understood that the future of retail is online, and Marks is more that a little late to the game of food delivery. Investors were less than impressed by Mark& Spencer’s decision to cut the dividend by 40% as part of the mechanism to pay and Marks is clearly paying for being late to the food delivery party. Marks share price dived and Ocado’s climbed in a fair reflection of who came our on top in this deal.
Pound extends rally through $1.33
The pound had another stellar session on Wednesday climbing through $1.33 for the first time since July. The pound has booked gains of 2% for the week so far as the uncertainties of the Brexit process and outcome are slowly being ironed out. Pound traders are increasingly more convinced that the no deal Brexit option is as good as off the table. This afternoon ministers will have their say on the next steps of Brexit. As the commons prepares to vote on amendments to the government’s negotiating strategy is pound is remaining steady close to session highs.
Dollar at 96 as Fed Powell speaks again
Helping to keep the pound buoyant was a slightly weaker dollar. The greenback was struggling to keep its head above 96.00 versus a basket of currencies following Fed Chairman Jerome Powell’s reaffirmation of a patient approach to hiking interest rates. Traders are now focusing on Powell’s second appearance. He is not expected to stray from yesterday’s cautious message so no sudden increase in dollar volatility is expected.
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