MARKET REPORT: Blue chips set a record as pound drops to $1.27 after poll showed a narrowing Conservative election lead
The FTSE 100 reached a new all-time high prompted by a sterling sell-off.
Blue chips gained 0.4 per cent to end the day up 29.92 points at 7547.63, as the pound dived 1.2 per cent to $1.2791 after a poll showed a narrowing Conservative lead for the general election.
The fall in sterling boosted the main index because many of its companies make much of their money in foreign currencies.
It capped more than a week of straight gains for the FTSE 100, from 7436 on Thursday, May 18. Its previous highest close was 7522 on May 16.
Pound sell-off: The fall in sterling boosted the main index because many of its companies make much of their money in foreign currencies
The mid-market FTSE 250 index also closed up, rising 57.34 points, or 0.29 per cent, to a record 20,024.92.
Lifting it was budget airline owner Wizz Air Holdings, where shares continued to climb yesterday, 24 hours after bosses reported a 28 per cent rise in full-year profit.
The Budapest-based budget airline carried 23.8m passengers last year, 19 per cent more than the year before, and it plans to carry 30m this year.
Shares have risen by around 17 per cent since Wednesday, climbing yesterday 3.7 per cent, or 81p, to 2285p.
Rival budget airline Easyjet was having a less successful day. It was of the biggest fallers on the FTSE 100 during the morning, as reports emerged from Gatwick airport about a baggage belt failure, meaning passengers had to fly without luggage. Shares recovered to close up 0.4 per cent, or 6p, to 1386p.
Spirax-Sarco Engineering was the FTSE 350’s second largest gainer during the day after it announced that it was buying US-based thermal technology company Chromalox, for £324million.
Chromalox – which makes industrial heaters that help regulate temperature for DNA research, aeroplane fuel tanks, and NASA’s space shuttle – has five manufacturing sites in North America, France and China.
Spirax, based in Cheltenham, Gloucestershire, makes steam traps and pumps for industries such as food, healthcare and power generation.
Bosses said the purchase would add to 2017 earnings and expand their market by £2.1billion to £7.9billion. Liberum analysts predicted a 13 per cent earnings boost. Shares rose 8.5 per cent, or 450p, to 5760p.
Investors also cheered soaring profits at Volvere, the turnaround investment company that owns pie and pasty maker Shire Foods.
Profit rose from £1.3million to £2million for the year ending December 31, on the back of revenue up from £27.9million to £33million.
Net assets per share rose from £5.69 to £6.17. Bosses said the performance of Shire Foods, based in Leamington Spa, Warwickshire, was ‘satisfactory’ – with profit up from £890,000 to £910,000 – but hailed ‘encouraging’ results at their new purchase Impetus Automotive.
Volvere bought Impetus, a vehicle manufacturing consultancy, for £1.3million in 2015. It made £1.1million last year compared with £300,000 during the nine months to December 2015. Shares rose 11.2 per cent, or 75p, to 747.5p.
It was also a good day for investment firm British Empire Trust, with bosses saying they outperformed their benchmark by 4.2 percentage points.
Net asset value total returns for the six months to March 31 were up 15 per cent. Bosses said AP Alternative Assets was its biggest contributor while Hudson’s Bay was its biggest detractor.
The fund also benefited from the fall in sterling. Shares have climbed steadily over the past year, and gained 4.5p, or 0.7 per cent, yesterday to close at 681p.