THE pound soared nearly three per cent while £27 billion was wiped off the FTSE 100, after Prime Minister Theresa May used a major speech to detail priorities ahead of Brexit negotiations.
Sterling rose more than 2.8 per cent against the US dollar to 1.238. Against the euro, sterling rose 1.8 per cent to 1.156.
It shaved 106.75 points from the FTSE 100, to closer lower by 1.46 per cent at 7,220.38 points, its biggest one-day spill since June 27 when the index fell 2.55 per cent in the wake of the Brexit vote.
Sterling strength tends to negatively affect multinational stocks on the blue chip index, which benefit when international currencies are stronger.
Markets were reacting to a much-anticipated speech from Mrs May who set out 12 key objectives for EU withdrawal, and confirmed the Brexit agreement between Britain and the EU would have to navigate both Houses of Parliament before coming into force.
She also announced Britain will not hold on to membership of the European single market, but would aim to achieve the "greatest possible access to it" through a "bold new free trade agreement".
Across Europe, the French Cac 40 fell 0.46 per cent and the German Dax dropped 0.13 per cent.
In oil markets, Brent crude prices rose by 0.38 per cent to $55.87 per barrel (£45.13), with international investors taking advantage of cheaper dollar-denominated commodities such as oil as the greenback weakened against a basket of currencies.
In UK stocks, Rolls-Royce Holdings rose 29.5p at 694.5p, as the company agreed to pay £671 million to British, US and Brazilian authorities to settle bribery and corruption claims.
British American Tobacco (BAT) shares fell 182.5p to 4,580p after the Dunhill and Lucky Strike maker agreed to pay $49.4 billion (£40.8bn) to take full control of US rival Reynolds in a deal creating the world's largest listed tobacco company.
The mega-merger comes after months of talks between the pair and sees BAT, which already owns 42.2 per cent of Reynolds, unveil a higher offer of $59.64 (£49.27) a share for the remaining 57.8 per cent of the company.
Shares in Hotel Chocolat fell 3p to 292p despite it notching up an impressive 16.2 per cent rise in second quarter sales as it benefited from a strong Christmas.
Mears Group rose 4.25p to 460.25p after the care and support services provider said it will deliver "solid" trading figures for 2016 and confirmed the overhaul announced in August is "substantially complete".
The biggest risers on the FTSE 100 were Rolls-Royce Holdings up 29.5p at 694.5p, Hargreaves Lansdown up 50p at 1,329p, EasyJet up 35p to 1,058p, and Standard Chartered up 20.4p to 744.7p.
The biggest fallers on the FTSE 100 were British American Tobacco down 182.5p to 4,580p, Carnival down 149p to 4,113p, Intertek Group down 114p to 3,449p, and Wolseley down 159p to 4,866p.
Why are you making commenting on The Herald only available to subscribers?
It should have been a safe space for informed debate, somewhere for readers to discuss issues around the biggest stories of the day, but all too often the below the line comments on most websites have become bogged down by off-topic discussions and abuse.
heraldscotland.com is tackling this problem by allowing only subscribers to comment.
We are doing this to improve the experience for our loyal readers and we believe it will reduce the ability of trolls and troublemakers, who occasionally find their way onto our site, to abuse our journalists and readers. We also hope it will help the comments section fulfil its promise as a part of Scotland's conversation with itself.
We are lucky at The Herald. We are read by an informed, educated readership who can add their knowledge and insights to our stories.
That is invaluable.
We are making the subscriber-only change to support our valued readers, who tell us they don't want the site cluttered up with irrelevant comments, untruths and abuse.
In the past, the journalist’s job was to collect and distribute information to the audience. Technology means that readers can shape a discussion. We look forward to hearing from you on heraldscotland.com
Comments & Moderation
Readers’ comments: You are personally liable for the content of any comments you upload to this website, so please act responsibly. We do not pre-moderate or monitor readers’ comments appearing on our websites, but we do post-moderate in response to complaints we receive or otherwise when a potential problem comes to our attention. You can make a complaint by using the ‘report this post’ link . We may then apply our discretion under the user terms to amend or delete comments.
Post moderation is undertaken full-time 9am-6pm on weekdays, and on a part-time basis outwith those hours.
Read the rules hereLast Updated:
Report this comment Cancel