Decreasing value of pound helps London avoid big price falls seen elsewhere

The chances of interest rate cuts at coming central bank meetings are falling, experts believe.

London’s top share index avoided some of the larger falls of its international peers as it was helped by the falling value of the pound on international markets.

The FTSE 100 fell 2.68 points, or 0.04%, to end the day at 7,612.86.

Chris Beauchamp, chief market analyst at online trading platform IG, said that the purchasing managers’ index (PMI) data from the US company ISM showed that the economy was doing better than expected.

This could mean that it is going to be longer until interest rates start to be cut by the Federal Reserve.

“Markets managed to shrug off Friday’s stellar payrolls report, but today’s ISM services PMI seems to have dealt the death blow to any lingering hopes that a March rate cut was still on the cards,” he said.

“It looks like the relentless optimism seen so far on Wall Street is finally beginning to collide with reality, delivering a 400-point slump on the Dow and knocking the S&P 500 off course from its march to 5,000.

“The selling in US markets has spread back across the Atlantic but, with sterling at the mercy of a rampant US dollar, the losses for the FTSE 100 have been contained, at least for now.

“But no central bank seems in much of a hurry to cut rates, so the pain for stocks on both sides of the ocean seems set to continue.”

At the end of the day in Europe, Frankfurt’s Dax index fell 0.08%, while the Cac 40 in Paris had closed down 0.03%.

In New York, a little while after markets had closed in Europe, the S&P 500 was trading down 0.45%, while the Dow Jones was 0.93% lower

On currency markets, the pound was trading 0.86% lower against the dollar at 1.2531 and had dropped 0.33% against the euro at 1.1673.

In company news, shares in CMC Markets soared 18.22% after the business revealed plans to start cutting costs.

The £21 million cost-cutting drive will include the axing of about 200 jobs, the spread-betting platform said.

Elsewhere, shares in telecoms giant Vodafone closed down 2.74% despite the business saying that revenue from its UK service segment rose 5.2% in the last three months of the year.

Reported global sales dropped by 2.3%, Vodafone said.

The biggest risers on the FTSE 100 were: Ocado, up 18p to 523p; GSK, up 51.4p to 1,662.6p; Croda, up 80p to 4,943p; Smith & Nephew, up 18p to 1,115p; and Diageo, up 47.5p to 2,984p.

The biggest fallers on the FTSE 100 were: JD Sports, down 5.95p to 107.05p; Airtel Africa, down 4.9p to 106.5p; Ashtead, down 232p to 5112p; Howden Joinery, down 31.8p to 771.2p; and Barclays, down 5.04p to 145.68p.

By Press Association