London close: Markets finish firmer on Brexit deal chatter

London stocks popped higher by the close on Wednesday, as sterling was lifted by reports that a Brexit deal between the UK and the EU was all but announced.

The FTSE 100 ended the session up 0.66% at 6,495.75, and the FTSE 250 was 1.74% firmer at 20,297.76.

Sterling was well into the green against its major trading pairs, last rising 1.11% on the dollar to $1.3509, and strengthening 0.84% against the euro to €1.1078.

“Increased chatter than the UK and the EU will reach a trade deal has boosted sentiment,” said CMC Markets analyst David Madden.

“Equity markets were already up on the session in advance of the optimism surrounding the trade talks, so then the bullish move was turned up a notch.”

Madden said the Covid-19 crisis was still very much in the news, but for now traders were fixated on the UK-EU situation.

“On the London market, banks, housebuilders, airlines and transport stocks are showing decent gains.

“The FTSE is seeing its gains capped by the rise in the pound - which has pushed internationally focused stocks like Reckitt Benckiser, AstraZeneca and Diageo into the red.”

Earlier in the afternoon, a senior EU diplomat said a trade deal between the UK and European Union was "imminent" and could be agreed by the evening.

According to Reuters, the diplomat said EU member states would have to approve a provisional application of the deal with effect from 1 January as there is not enough time for it to be ratified by the European Parliament.

Sources said a deal was "pretty much there" and would be announced "today or tomorrow".

Earlier, Sky News political correspondent Joe Pike tweeted: "BREAKING: No 10 source: ‘The deal is done’."

That was followed a few minutes later by: "However other senior No 10 sources far more cautious: ‘We’re still talking’."

According to the Guardian, EU states were preparing for the possibility of a Brexit deal being struck within the next few hours, scheduling a Christmas Eve meeting to start the ratification process.

It was understood that ambassadors in Brussels had been told to be available to meet on Thursday should the negotiations bear fruit.

Overnight, ITV had reported that a Brexit deal was possible after progress in talks on fishing rights.

The broadcaster’s political editor Robert Peston tweeted late on Tuesday: "A UK source now says agreement on a UK/EU trade deal is again possible tomorrow.

"Presumably because, says a separate source, there was movement late tonight on access to the 6-12 mile (offshore) zone, ocean fishing and the sanctions regime after the interim period of moving towards new quotas."

Meanwhile, France agreed to ease UK border restrictions.

Only truck drivers, and French and EU citizens or residents who could show a negative Covid test result, would be allowed to enter until at least 6 January, meaning disruption was unlikely to end in the short term.

In equity markets, Premier Inn owner Whitbread shot up 4.01% following a report in the Times that the company had asked its landlords for a 50% rent reduction for the next three months as hotels and restaurants took a hit from the pandemic.

Engine maker Rolls-Royce was ahead 2.62% and British Airways and Iberia owner IAG was 6.27% higher, having fallen sharply at the start of the week.

Shares of Cairn Energy surged 34.54% after the oil and gas exploration and development company won a long-standing tax dispute with the Indian government over backdated charges and said it will receive $1.2bn in damages, plus interest and costs.

On the downside, online supermarket Ocado and Just Eat Takeaway were both in the red, by 1.15% and 2.37%, respectively.

Market Movers

FTSE 100 (UKX) 6,495.75 0.66%
FTSE 250 (MCX) 20,297.76 1.74%
techMARK (TASX) 4,071.64 0.58%

FTSE 100 - Risers

Lloyds Banking Group (LLOY) 37.13p 7.00%
International Consolidated Airlines Group SA (CDI) (IAG) 161.80p 6.27%
NATWEST GROUP PLC ORD 100P (NWG) 166.90p 5.03%
Berkeley Group Holdings (The) (BKG) 4,630.00p 4.67%
JD Sports Fashion (JD.) 850.20p 4.50%
Persimmon (PSN) 2,829.00p 4.24%
Legal & General Group (LGEN) 259.80p 4.17%
Barratt Developments (BDEV) 676.00p 4.16%
Whitbread (WTB) 3,128.00p 4.01%
Barclays (BARC) 151.82p 4.00%

FTSE 100 - Fallers

Just Eat Takeaway.Com N.V. (CDI) (JET) 8,000.00p -2.37%
Reckitt Benckiser Group (RB.) 6,452.00p -1.59%
CRH (CRH) 3,115.00p -1.46%
AstraZeneca (AZN) 7,224.00p -1.42%
Experian (EXPN) 2,779.00p -1.24%
Diageo (DGE) 2,933.00p -1.21%
Halma (HLMA) 2,427.00p -1.18%
Ocado Group (OCDO) 2,239.00p -1.15%
Bunzl (BNZL) 2,432.00p -1.10%
Rentokil Initial (RTO) 510.00p -1.01%

FTSE 250 - Risers

Cairn Energy (CNE) 202.60p 22.12%
Virgin Money UK (VMUK) 138.50p 8.50%
easyJet (EZJ) 832.00p 7.35%
Hammerson (HMSO) 25.40p 7.33%
Mitchells & Butlers (MAB) 239.00p 6.95%
OSB Group (OSB) 436.60p 6.70%
Wetherspoon (J.D.) (JDW) 1,094.00p 6.06%
Provident Financial (PFG) 300.60p 5.60%
Babcock International Group (BAB) 282.70p 5.53%
Law Debenture Corp. (LWDB) 674.00p 5.48%

FTSE 250 - Fallers

Just Eat Takeaway.Com N.V. (CDI) (JET) 8,000.00p -2.37%
Rotork (ROR) 315.40p -1.74%
Victrex plc (VCT) 2,302.00p -1.37%
Petropavlovsk (POG) 30.85p -1.28%
Ibstock (IBST) 205.00p -1.25%
Spirent Communications (SPT) 262.50p -1.13%
Games Workshop Group (GAW) 10,930.00p -1.09%
Genesis Emerging Markets Fund Ltd Ptg NPV (GSS) 872.00p -1.03%
Clarkson (CKN) 2,525.00p -0.79%
Ultra Electronics Holdings (ULE) 2,100.00p -0.76%