The UK's blue chip share index is on course to reach a record high. 

The FTSE 100 is now up 1.8% at 7,106 points. If it finishes the day at that level, it'll beat the all-time closing high of 7,104 it reached back in April 2015.

It's only the seventh time in the index's 32-year history that it's gone above 7,100 points.

Image source, Thinkstock

With interest rates so low, company dividends are a welcome stream of income for investors.

But the ability of companies to payout those dividends is "worryingly thin" according to investment services firm AJ Bell.

Ideally a company's earnings would be twice the size of its annual dividend payment, the company says.

But its research has found that the companies with the top ten dividend yields are below that level.

"Some of the juiciest-looking forecast dividend yields could just prove too good to be true," said Russ Mould, investment director at AJ Bell.

Image source, Getty Images

Mercedes-Benz plans, external to enter the Formula e Championship, external, an electric car racing series.

It has taken up an option race in the 2018-2019 season. That's when the series expands from 10 to 12 teams.

Audi and Renault are already in the championship.

"Electrification will play a major role in the future of the automotive industry. Racing has always been a technology R&D platform for industry and this will make Formula E very relevant in the future,”  said Toto Wolf, who is in charge of Mercedes motor racing said:

Mercedes is expected to introduce a new brand of electric cars in the near future. 

Suranjana Tewari
Business journalist, BBC World News

Image source, Getty Images

The Reserve Bank of India has cut key interest rates by 25 basis points to 6.25%. 

Tuesday's monetary review was the first by Urjit Patel since he took over as Governor of the RBI from Raghuram Rajan. 

It's the first time the decision fell to a six-member monetary policy review committee, much like the US Fed process. The committee has equal representation from the RBI and the government.   

Image source, BHP Billiton

To put the FTSE 100's rise into perspective, it's shot up 28% since its lowest point this year. 

Mining stocks are by far the biggest risers in that time, helped by a recovery in commodity prices and the post-referendum fall in the pound. Easyjet and Next are two of the heaviest fallers.

Best performing FTSE 100 shares since 2016 low (according to Hargreaves Lansdown)

1. Anglo American +215%
2. Glencore +145%
3. Fresnillo +109%
4. BHP Billiton +87%
5. Smiths Group +70%

Worst performing since 2016 low

1. Capita -37%
2. Easyjet -31%
3. Next -28%
4. ITV -23%
5. Royal Bank of Scotland -20% 

One analyst has suggested that as well as benefiting from the fall in the pound, the FTSE 100 and 250 have also been boosted by record-low interest rates.

The fall in the pound has also propelled the UK's FTSE 250 share index to a record high. 

The index, which is made up of the next 250 biggest UK-listed companies behind those in the FTSE 100, is currently trading at 18,470 points. 

Michael Hewson of CMC Markets says it's had a "double boost" from the weaker pound and recent UK economic data.

There are plenty of companies with international businesses on the index, he says. Because of the weaker pound, profits made abroad are worth more when converted back into sterling.

Companies that are focused more on the UK are also benefiting from economic data which has been "decent in recent weeks", he says.

Taking a longer-term view, though, the overseas firms have fared much better this year than British businesses, as this FT chart suggests...

Image source, LVMH

German luxury suitcase-maker Rimowa has a new owner.

LVMH, owner of Louis Vuitton and Dior, is paying 640 million euros (£560m; $716m) for 80% of the company, which is famous for its aluminium suitcases made with parallel grooves.

It's buying the stake from the founder's grandson Dieter Morszeck, who will become co-chief executive with Alexandre Arnault.

The deal is set to be completed in January 2017, LVMH said in a statement., external

One reason the pound has fallen to a 31-year low against the dollar could be that the US currency is stronger.

The dollar is performing well because the markets think it's becoming more likely that the US Federal Reserve will raise interest rates in December, said Michael Hewson of CMC Markets. Traders are now giving it a 61% probability.

Other major currencies - including the Japanese yen and euro - have also fallen against the dollar this morning.

Image source, PA

The UK's construction sector has returned to growth for the first time since May, according to the latest survey of purchasing managers from Markit/CIPS, external.

Its Construction Purchasing Manager's Index rose to 52.3 in September. Anything above 50 indicates expansion, and the index has not been above that level in four months.

Tim Moore, senior economist, at IHS Markit said:

“Resilient housing market conditions and a renewed upturn in civil engineering activity helped to drive an overall improvement in construction output volumes for the first time since the EU referendum.

“A number of survey respondents noted that Brexit-related anxiety has receded among clients, although it remained a factor behind the ongoing decline in commercial building work."

Image source, Ericsson

Ericsson is cutting 3,000 jobs in Sweden, external. The company, which makes equipment for telephone networks, says the cuts will hit research and development, sales and administration.

Ericsson has around 16,000 staff in Sweden.

The company says it wants to focus on new technologies and will recruit 1,000 staff, primarily from universities, to work in research and development over the next three years.

Shares in struggling lender Deutsche Bank have risen by 3% in early trading to hit a two-week high. 

It's the first day of trading in its shares in Frankfurt this week after a bank holiday in Germany on Monday.

Shares in Germany's biggest bank slumped to 33-year lows last week before rebounding on expectations of a swift deal with US authorities over a multi-billion dollar penalty.   

Analysts at HSBC said that despite Deutsche Bank's obvious operational shortcomings, fears over the bank's solvency were overdone. 

However, they also said banks continued to face difficult circumstances and that Deutsche Bank might lose revenues due to the short-term lack of confidence.

Michael Hewson is the chief market analyst at CMC Markets. He reminds us that if you allow for the falling value of the pound, then the FTSE 100 is actually lower for the year.

Today Programme
BBC Radio 4

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Prime Minister Theresa May says the UK cannot go into the Brexit negotiations thinking which bits of the European Union it would like to keep. 

Instead, "we need to have a different approach", she tells the Today Programme. 

"When we come out of the European Union we will be a sovereign country," she says. The main question then is: what relationship do we want to have with the EU?

"I think it's not about the UK being a supplicant to the EU, it's about reciprocity," she adds.

The Prime Minister's comments will add to the impression that she is in favour of a full Brexit - where the UK gives up membership of the Single Market and has to negotiate a new deal.

Image source, Bloomberg

The FTSE 100 is now up by 1% at 7,060.

It's not that far from it's all-time closing high of 7,103 hit on 17 April 2015 (see chart above).

This from Connor Campbell, financial analyst at SpreadEx:

"The pound’s perilous position has continued this Tuesday, with sterling still suffering from the aftershock of Theresa May’s (hard) Brexit promises.

"In terms of silver linings the pound’s protracted demise has continued to lift the multinationals that make up the FTSE 100...

"Just like yesterday the UK index’s rise will be tested by a PMI reading, with this morning the turn of the construction sector. While the manufacturing and services PMIs have recently been a source of comfort, the construction survey has lagged behind, missing out on last month’s surprise boost to remain in contraction territory.

"September’s reading is meant to be even worse."

The blue-chip FTSE 100 index of the UK's biggest firms has broken through the 7,000 barrier. 

It's shot up 43 points at the opening bell to 7,026 points after the pound fell to its lowest level against the dollar since 1985.

The FTSE 100 is full of firms with large overseas businesses which benefit from a weaker pound.

It last finished above 7,000 points in May 2015.

So what's causing the pound to tumble against the dollar? Analysts at Commerzbank said: 

"What is causing particular uncertainty among investors are the strong affirmations of the British government to insist on limiting the freedom of movement. 

"This increases fears of a 'hard' Brexit because so far nobody sees a possibility of achieving this without [Prime Minister Theresa] May having to accept notable restrictions when it comes to accessing the single market. 

"That in turn is likely to lead to considerable economic effects and be of notable relevance for the attractiveness of sterling investments." 

Image source, Bloomberg

The pound has taken another turn for the worse. It has fallen as low as $1.2780.

That's below the low-point it hit immediately after the result of the EU referendum and the lowest level against the dollar since 1985.