Sunday 20 October 2019

FTSE 100 boosted by hopes of Brexit breakthrough

The index was pushed higher by housebuilders and banks as five companies showed double-digit percentage growth.

The FTSE 100 pushed higher as markets reacted to a potential breakthrough in Brexit talks. (Stefan Rousseau/PA)
The FTSE 100 pushed higher as markets reacted to a potential breakthrough in Brexit talks. (Stefan Rousseau/PA)

By August Graham, PA City Reporter

The FTSE 100 rose on Friday as housebuilders and other UK-focused firms led the way, buoyed by a light at the end of Brexit negotiations.

The index closed 60.72 points higher to end the week at 7,247.08.

The index does not normally react strongly to Brexit news as most companies focus on international business.

Pound traders are growing in confidence that a no deal Brexit will be avoided in three weeks’ time. Fiona Cincotta, analyst at City Index

But on Friday, the UK banks and housebuilders led the way, with five companies on the FTSE 100 posting double-digit percentage growth.

The FTSE 250, which is a better gauge of Brexit breakthroughs, closed up 805.99 points at 20,041.71, a 4.19% rise.

On Thursday, Prime Minister Boris Johnson and Irish Taoiseach Leo Varadkar said they had found a “pathway” to reach a Brexit deal.

The news also sent the pound soaring, hitting 1.281 against the dollar, an almost 2% rise on the day, and nearly 4% up since Thursday afternoon. It rose 1.6% against the euro to 1.1483.

“Pound traders are growing in confidence that a no deal Brexit will be avoided in three weeks’ time,” said Fiona Cincotta, an analyst at City Index.

Markets are also looking forward to a meeting between US president Donald Trump and Chinese vice premier Liu He.

“Dealers are optimistic as Trump tweeted that ‘good things are happening’ at the trade talks,” said David Madden, an analyst at CMC Markets.

He added: “Dealers have been taking their cues from the US President, so hopes are running high.”

In Europe, Germany’s Dax closed up 2.86% to 12,511.65 points while French index, the Cac, rose 1.73% to 5,665.48 points.

In company news, Entertainment One, the company behind Peppa Pig, reported widening losses as it prepares to be sold to toy giant Hasbro.

The London-listed firm slid to a £43.9 million loss for the three months to June 30, down from a £6.8 million loss the previous year, after it was struck by a £28 million one-off payment.

Meanwhile, Dart Group, which owns Jet2, said demand was growing for its holidays and flights after the collapse of Thomas Cook.

Shares closed up 154.5p at 1,090p after it said it expects profits to be higher than previously forecast on the back of strong later season bookings.

Management at TP ICAP ignored “obvious red flags” that its staff were carrying out improper trades, the market regulator has said as it fined the broker £15.4 million. Shares closed up 5.6p at 323.5p.

Oil ticked higher over the day as reports of an explosion on an Iranian oil tanker sparked fears of an escalation of tensions in the Middle East.

Brent crude, the international standard, was up 1.8% to 60.17 dollars per barrel.

The biggest risers on the FTSE 100 were Lloyds, up 6.43p at 59.13p, Barratt Developments, up 67.6p at 654.4p, Royal Bank of Scotland, up 22.45p at 218.3p, Persimmon, up 224p to 2,287p, and Taylor Wimpey, up 16p to 163.75p.

The biggest fallers on the index were Fresnillo, down 23.4p at 630.8p, British American Tobacco, down 100p at 2,710p, WPP, down 32.8p at 931p, Diageo, down 111.5p at 3,210p, and Unilever, up 132.5p at 4,647p.

PA Media

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