The FTSE has closed at a near record high of 7,074.34 today, alleviating doubts about the state of the British economy in the wake of the Brexit result, but leaving many Irish investors short changed.
The FTSE soared 1.3%, nearing the all-time closing high of 7,104 it reached in April 2015.
The dramatic growth was due in part to the weakening pound, which dropped in value to a value of 1.2736 against the dollar, a 31 year low, which led to a favourable forecast for large exporters such as GlaxoSmithKline, and Guinness’ parent company Diageo.
Strong performances from the UK’s mining and manufacturing industries pushed the index higher still.
The surge in the London stock market index comes the same day as the International Monetary Fund has predicted the UK to be the fastest growing G7 country this year, and has admitted that its earlier analysis of the post-Brexit market had been an overly pessimistic one.
The surge does not bode well for Irish investors, many of whom have seen a 4.5% fall in the value of their investments due to the lower worth of the pound compared to the euro.
David Holohan, chief investment officer at Dublin’s Merrion Capital, said: “This highlights the challenge for investors as a result of sharp currency moves. An [Irish] investor can have a very strong share price performance [in a UK stock] but when converted back to euros the performance can be very different.”
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