FTSE slides as pound gains on May speech

Market trader (file picture) Image copyright Getty Images

The UK's benchmark share index lost ground as the pound surged following Theresa May's speech on Brexit.

The FTSE 100 share index had already been trading lower, but dropped further as the pound strengthened, and was down 106.72 points at 7,220.38 by the close.

For multinational firms on the FTSE 100, a stronger pound means profits earned overseas are worth less when they are converted back into sterling.

Sterling soared back above the $1.23 mark following Mrs May's speech.

The pound had already been trading higher, but took off during the speech and throughout the afternoon to close up nearly 2.9% against the dollar, or three and a half cents, at $1.2392 for the day as a whole.

Against the euro, the pound was up 1.83% at 1.157 euros.

On the stock market, shares in Rolls-Royce jumped nearly 7% before losing some of the gains to 694.50p after the engineering firm agreed to pay £671m to settle bribery and corruption cases with UK and US authorities.

British American Tobacco (BAT) shares slipped 3.83% to £45.80 after the company said it had agreed a deal to take control of US rival Reynolds,

The $49.4bn (£40bn) deal will see BAT buy the 57.8% stake in Reynolds that it does not already own.

STockbrokers Hargreaves Lansdown closed up 4%, making it the second best riser of the top 100.

Bakery chain Greggs saw its shares rise 1.2% to £10.13 after it said full-year profits were set to beat expectations following "strong" Christmas sales.

Like-for-like sales grew 6.4% in the final three months of the year, and were up 4.2% in the year as a whole.

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