Europe close: Reports of 'imminent' Brexit deal boost shares
European shares closed higher on unconfirmed reports that a Brexit deal could be imminent with a deadline only days away, France lifting its snap blockade of the UK also cheered investors.
The pan-European Stoxx 600 was up 1.08%. The pound soared on the Brexit news, which in turn held back the UK’s FTSE 100 relative to its regional peers as a majority of its constituents are predominantly exporters who benefit from a weak sterling.
News that more English regions were to be placed into a new tougher regime of Covid restrictions – known as Tier 4 – from Boxing Day also weighed on sentiment.
Sterling rose 1% against the dollar to $1.349 and 0.68% against the euro to €1.10.
“The Covid-19 crisis is still very much in the news but for now traders are fixated on the UK-EU situation. On the London market, banks, housebuilders, airlines and transport stocks are showing decent gains,” said CMC Markets analyst David Madden.
France reopened its borders on Wednesday after imposing a ban in response to the discovery of a new strain of the coronavirus in the UK. Thousands of trucks have been stranded outside the key British port of Dover, threatening food supplies during the Christmas period.
Truck drivers will now be allowed to enter France via the Channel tunnel or ferry only if they provide a negative test for the virus. The government has mobilised the army to help carry out the tests.
In the US, shares shrugged off threats by soon-to-be-former President Donald Trump to veto the $900bn coronavirus aid package unless Congress increases cheque payments to $2,000 per person from the proposed $600, despite the fact that his own Republican party has been vehemently opposed to any uplift in support.
In equity news, Daimler stock rose 3.3% on reports the luxury automaker is planning a stock market listing of its trucks division. It could be floated at the end of 2021, Handelsblatt reported, citing company sources.
EasyJet shares soared on the Brexit news, while banking sector shares were also higher, with Lloyds, Banco de Sabadell and NatWest all up.
Internationally-focused stocks Reckitt Benckiser, AstraZeneca and Diageo were all lower.