The FTSE 100 seemed to be stuck in a state of suspended animation on Wednesday with the index surrendering early gains to trade flat,” says AJ Bell investment director Russ Mould.
“Its performance is being constrained by continuing gains for sterling which crimp the relative value of the overseas earnings which dominate the index.
“The pound’s strength reflects the UK’s strong progress on vaccine rollout, the Bank of England’s apparent retreat from the idea of negative interest rates and dollar weakness as traders eye the huge US stimulus package coming down the track.
“A better guide to investor sentiment, given this currency-related headwind, are the new records being set by US and Asian stocks as the Covid relief package planned by the Biden administration draws the focus away from a bleak winter to a potential spring and summer of recovery from the worst of the pandemic.
“Brent crude oil was steady at $60 per barrel after the strong run seen in recent days while gold remains stuck in the tight range it has seen for the last few months, up a little to $1,846 per ounce.”