MARKET REPORT

THE London market edged into positive territory yesterday as investors remained cautious over Brexit and braced for a potential interest rate hike from the US Federal Reserve.

The FTSE 100 Index closed up 10.79 points at 7368.64, with Fed chair Janet Yellen expected to push up the cost of borrowing for only the third time since the financial crisis, increasing it by a quarter of a percentage point to 1.25%.

Despite a subdued day’s trading, energy stocks gave the top-flight some uplift thanks to a rebound in the price of Brent crude, which rose more than 1% to $51.67 a barrel. Royal Dutch Shell was up 7p to 2,190.5p.

Across Europe, Germany’s Dax was up 0.1% and the Cac 40 in France was 0.2% higher.

On the currency markets, the pound pared gains against the US dollar after the latest tranche of economic data showed a drop in unemployment and a slowdown in wage growth.

The UK’s unemployment rate has fallen to its lowest since the summer of 1975, with a record number of people in work.

However, average earnings increased by 2.2% in the year to January, down by 0.4% on the previous month, according to the Office for National Statistics.

Sterling eased back to rise 0.5% to 1.221 versus the greenback, as currency traders became concerned about the squeeze on British consumers amid rising inflation and flagging wage growth.

The pound was 0.2% higher versus the euro at 1.147.

In UK stocks, Lloyds Banking Group rose 0.4p to 68.2p following the announcement that the Government had sold off another slice of its shareholding.

The sale means more than £19.5bn has now been returned to Government coffers since the lender’s £20.3bn bailout at the height of the financial crisis.

Hikma Pharmaceuticals was at the summit of the biggest risers, as the firm hiked up its 2016 dividend by 3% despite flagging revenues and profits.

Shares were up 171p to 2,297p.

The biggest risers on the FTSE 100 Index were Hikma Pharmaceuticals up 171p to 2,297p, Glencore up 9.1p to 325.1p, Babcock International up 20.5p to 914.5p, Antofagasta up 18p to 806.5p.

The biggest fallers on the FTSE 100 Index were Informa down 8.5p to 643p, TUI down 15p to 1,141p, Old Mutual down 2.7p to 222.8p, Persimmon down 24p to 2,073p.