FTSE 100 Declines by 0.7% as Strong sterling Impacts Export-Focused Companies

Today, the FTSE 100 declined by 0.7%, driven by a stronger sterling that negatively affected export-oriented businesses. Despite the decrease, the blue-chip index remains poised for its fifth consecutive week of gains.

This week, the FTSE 100 reached a record high as global markets rallied on signals that U.S. President Donald Trump is adopting a more relaxed approach toward tariffs on China. Additionally, investor optimism was fueled by expectations that Trump would stimulate the U.S. economy through tax reductions and substantial investments in artificial intelligence.

The pound surged to a two-week high against the dollar today, partly due to the absence of clear tariff policies during Trump’s first week in office. This strengthening of sterling put downward pressure on shares of multinational corporations such as Shell and HSBC.

In contrast, UK-listed global mining companies like Antofagasta, Glencore, and Rio Tinto saw their stock prices rise. This uptick was driven by a significant increase in copper prices, which reached their highest levels in over two months, spurred by hopes of a U.S.-China trade agreement.

Meanwhile, the FTSE 250 mid-cap index finished the day relatively flat. Small-cap stocks struggled as well, with the AIM All-Share Index falling 0.8% (six points) on Friday and heading toward a weekend close 0.4% lower.

Elsewhere, Marks and Spencer Group PLC remained the day’s top decliners, dropping 3.6%. The market saw few significant movers, with Taylor Wimpey PLC and Compass Group PLC also registering losses.

On the upside, Diageo PLC led the gainers with a 3.7% increase, followed by JD Sports Fashion PLC and several mining firms benefiting from rising commodity prices.

Additionally, Burberry PLC sustained its 10.6% rise after reporting a third-quarter sales decline that was less severe than anticipated.