The FTSE 100 ended in negative territory on Monday, dragged down by a weaker dollar and lingering concerns over global growth.
London’s top flight closed down 26.54 points, or 0.39%, at 6,810.88.
Fiona Cincotta, senior market analyst at City Index, explained: “With around 70% of the FTSE constituents earning revenue abroad, a weaker dollar is a disadvantage for these multinationals.
“Multinational heavyweights such as AstraZeneca, Unilever and Diageo all moved lower.”
The dollar came under selling pressure as expectations grow that the US Federal Reserve will halt increasing interest rates, with chairman Jerome Powell saying the central bank “will be patient” with monetary policy as it watches the economy evolve.
Investors also remain on edge over ongoing US-China trade talks.
Stocks in the ascendancy, however, were retailers, buoyed by Aldi’s stellar figures over Christmas.
The budget German grocer rang up sales of almost £1 billion in the UK during December, its best ever Christmas trading period.
Sales were driven by customers switching from other food retailers amid higher demand for its premium ranges.
The influx of customers meant that the week of December 17 was Aldi’s busiest-ever in the UK, with sales more than 10% higher than the previous year.
The news helped drag the likes of Marks & Spencer, Tesco and Sainsbury’s higher by 7.6p to 260.7p, 5.1p at 202.5p and 5.7p at 265.7p respectively.
“Retailers and supermarkets were offering support to the FTSE in what is set to be a busy week for the sector.
“Higher sales from Aldi’s British unit boosted optimism that consumer were in a spending mood this festive period. Sainsbury’s and Marks and Spencer moved higher,” Ms Cincotta added.
Dunelm shares were also in demand after the homewares chain said that expectations for full-year profits are slightly ahead of market expectations.
Like-for-like sales at the retailer were 9% higher in the 13 weeks to December 29 and the firm’s shares closed up 89p, or 15.4%, at 667.5p.
Sterling, meanwhile, was lifted by a weaker greenback, gaining 0.3% versus the US currency to 1.276.
Versus the euro, the pound was down 0.3% at 1.113.
But David Madden, of CMC Markets UK, warned that Brexit is about to rear its head once again.
“Today was a quiet day in terms of economic announcements from the UK, and the positive move was dollar driven.
“Prime Minister May is trying to secure additional assurances from the EU, and the UK parliament is set to vote on her deal on 15 January.
“Huge uncertainty still persists, and any sign we are heading for a no-deal Brexit is likely to hurt the pound.”
In Europe, Germany’s DAX was down 0.18% and France’s CAC 40 was down 0.38%.
A barrel of Brent crude was trading at 58 US dollars, up 1.2%.
The biggest risers on the FTSE 100 were NMC Healthcare up 192p at 2,812p, Fresnillo up 40.8p at 916p, Antofagasta up 23.8p at 809.4p and Ashtead up 51.5p at 1,753.5p.
The biggest fallers on the FTSE 100 were Smurfit Kappa down 114p at 2,080, Imperial Brands down 122.5p at 2,330p.
Centrica down 6.05p at 131.25p and British American Tobacco down 108.5p at 2,474.5p.
