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London stocks rise at open after pound’s ‘flash crash’

 British Pound banknotes at a money exchange shop. The pound plunged more than six percent to a fresh 31-year low against the dollar on October 7, 2016, its latest slump after Britain firmed up details on the timing of its exit from the European Union.  / AFP PHOTO / YASSER AL-ZAYYAT

British Pound banknotes at a money exchange shop.<br />The pound plunged more than six percent to a fresh 31-year low against the dollar on October 7, 2016, its latest slump after Britain firmed up details on the timing of its exit from the European Union.<br />/ AFP PHOTO / YASSER AL-ZAYYAT

The London stock market rose at the open on Friday, buoyed by a “flash crash” in the beleaguered British pound, but Frankfurt and Paris held steady before key US data.

In initial trade, the British capital’s benchmark FTSE 100 index of top blue-chip companies rose climbed 0.7 percent to 7,047.29 points, as the crashing currency boosted the outlook for exporters.

In the eurozone, meanwhile, Frankfurt’s DAX 30 slid 0.2 percent to 10,549.69 points and the Paris CAC 40 was flat at 4,480.10 points compared with the close on Thursday, ahead of key US non-farm payrolls data.

In earlier Asian trading hours, the pound faced a “flash crash” on a computer-generated sell-off in the beleaguered currency, as tough talk from French President Francois Hollande underscored the perils for Brexit-bound Britain.

Sterling fell off a cliff to strike a 31-year low at $1.1841 before rebounding sharply. The euro also hit a seven-year-high 94.15 pence, before easing slightly.

Foreign companies listed in London have seen their shares rocket by the pound’s tumble as it boosts their earnings when they are converted into sterling.

“The pound had a rollercoaster ride overnight,” said City Index analyst Kathleen Brooks.

“The driver of this massacre: apparently algorithms reacting to comments … from French President Francois Hollande about the UK’s potential hard Brexit.”

Hollande sent one of the strongest warnings yet that Britain will have to pay a heavy price for leaving the EU, adding to deep concern in financial markets.




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