FTSE 100 flat as gains in energy, mining stocks offset stronger pound

London’s export-heavy FTSE 100 index traded flat on Tuesday as gains in mining and energy stocks countered a stronger pound, while data showed that a nationwide lockdown hurt consumer spending in January.

The blue-chip FTSE 100 was unchanged, with energy and mining stocks being the top performers. The mid-cap FTSE 250 index rose 0.1%.

The pound jumped to a near 34-month high as the dollar languished near its lowest in a week.

“This is more a story of dollar weakness as investors eye the big U.S. stimulus package coming down the road. A big fall in UK consumer spending (also) signalled once again the huge impact the current lockdown restrictions are having on the economy,” said AJ Bell investment director Russ Mould.

The retail index fell 0.5% after surveys showed British consumer spending plunged at the fastest rate in seven months.

However, the online share of British grocery sales hit a record 16% in January, up from 8% in the same month last year, driven by increased demand during the country’s third COVID-19 lockdown, industry data showed.

The FTSE 100 has recovered nearly 33% from its March 2020 lows, led by a raft of stimulus, but a surge in infections and widespread lockdowns recently have slowed economic growth. The index has also lagged its U.S. and European peers, which are up 75% and 47%, respectively.

Britain is also mulling tougher testing of people arriving from abroad while they self-isolate, in its efforts to defend against new variants of the virus.

Homebuilder Bellway (LON:BWY) Plc rose 3.5% after it reported strong demand for new homes, as low lending rates and a temporary cut in stamp duty boosted activity in the sector.

Ocado (LON:OCDO) Group fell 1.5% and was one of the top drags on the FTSE 100, even as the online grocer and technology group reported a 69% increase in 2019-20 core earnings.