FTSE 100 approaches record high as interest rate cuts ‘on the way’

Thanks for joining us. Retail sales came in better than expected last month in a sign Britain’s economy is moving out of recession.

Sales remained flat in February as food and fuel sellers saw a decline during the month, according to data from the Office for National Statistics (ONS).

However, economists had predicted sales to fall by 0.4pc, down from growth of 3.6pc the month before, the ONS said.

Online sales had grown during the month, especially for clothing, as last month’s wet weather pushed down the footfall of people heading out to the shops.

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What happened overnight 

The yuan fell sharply and Chinese shares skidded, dragging down markets broadly in Asia and dampening an equity rally spurred by a surprise rate cut in Switzerland that had investors wagering on who will ease policy next.

Traders also were on high alert as the yen crept back toward multi-decade lows despite jawboning efforts from Japanese government officials to shore it up and the central bank’s historic policy pivot earlier this week.

China’s yuan weakened sharply to a four-month low and breached the psychologically important 7.2 per dollar level. It was last nearly 0.4pc lower at 7.2243.

The fall prompted the country’s major state-owned banks to sell dollars for yuan in an attempt to slow its decline, sources told Reuters.

The yuan has been pressured by growing market expectations that Beijing needs to roll out more stimulus to stabilise the world’s second-largest economy, and by the weaker yen. The state bank buying did little to soothe investors’ nerves.

The mainland blue-chip CSI300 index and Shanghai Composite index each fell 1pc, while Hong Kong’s Hang Seng Index slid 2pc.

Elsewhere, Tokyo’s key Nikkei index ended at another record on Friday after Wall Street stocks also hit fresh highs on optimism about the US economy and Fed policy.

The benchmark Nikkei 225 index was up 0.2pc, or 72.77 points, to end at 40,888.43, while the broader Topix index added 0.6pc, or 17.01 points, to 2,813.22.

In America, US stocks extended their push to record highs yesterday, led by big gains for chipmakers.

The S&P 500 rose 0.3pc, to 5,241.53, and set an all-time high for a third straight day. Three out of every four stocks in the index gained ground.

The Dow Jones Industrial Average gained 0.7pc, to 39,781.37, and the Nasdaq Composite rose 0.2pc, to 16,401.84. Both indexes added to records set a day earlier.

The yield on benchmark US 10-year Treasury bonds was down 0.2 basis points to 4.269pc.

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