Brexit talks ensure another see-saw session for the pound
Sterling rose 0.7% at 1.288 US dollars, while the FTSE 100 Index closed down 43.69 points at 7167.95.
Sterling endured another roller-coasted ride on Wednesday as crunch Brexit talks continue in the hope of securing an eleventh hour deal.
The pound began the session on the back foot before surging against most major currencies amid signs that the UK and EU may be closing in on a Brexit agreement.
At the time of close in London, sterling was 0.7% higher at 1.288 US dollars and 0.3% higher at 1.16 euros.
There is still a huge amount of uncertainty surrounding what is going on Brexit-wise – not least because any agreement between the UK and EU still would need to get past some rather substantial parliamentary blockades Connor Campbell, financial analyst at Spreadex
But the FTSE 100 Index closed down 43.69 points at 7167.95 – a fall of 0.6% – with trade tensions between the United States and China in sharp focus.
The top tier also maintained its form of falling when the pound gains, given that it is primarily made up of international mining and oil stocks, which trade in US dollars.
All eyes were on the currencies market as the pound see-sawed ahead of the two-day European Union meeting that starts on Thursday and is increasingly being seen as a deadline for a deal to be achieved by Brexit day on October 31.
Connor Campbell, financial analyst at Spreadex, said: “There is still a huge amount of uncertainty surrounding what is going on Brexit-wise – not least because any agreement between the UK and EU still would need to get past some rather substantial parliamentary blockades.
“However, most of the noise being made at the moment is positive.”
Across the Atlantic, the Dow Jones Industrial Average on Wall Street was treading water, down seven points at the time of close in London.
Among stocks, online fashion firm Asos saw shares surge to a four-month high despite posting 68% fall in annual profit to £33.1 million.
The plunge was in line with its recent profit warning and investors are starting to see Asos turn the corner.
Shares in the group closed 28% higher, up 726p at 3,286p.
But Woodford Patient Capital Trust suffered further share declines, off 1.9p at 32.5p after the resignation of its former manager Neil Woodford.
Mr Woodford announced late on Tuesday that he was quitting as manager and closing down his investment management business after he was sacked from his flagship £3 billion Woodford Equity Income Fund, which will now be wound up.
Another of his funds – the Woodford Income Focus Fund – saw shares suspended from dealing on Wednesday amid a rush to pull out investor money.
Elsewhere, luxury car maker Aston Martin enjoyed some welcome gains in the FTSE 250 Index.
It finished the sessions 8% higher after a 33.7p hike to 480.9p, with broker Deutsche Bank putting a “hold” rating on the troubled stock, saying key risks to the group have already been factored into the shares.
The biggest FTSE 100 risers were United Utilities, up 24.6p to 890p, Severn Trent 44p higher at 2297p, Royal Bank of Scotland 3.6p ahead at 229.7p and DCC 96p stronger at 6976p.
The biggest FTSE 100 fallers were Hiscox off 83p at 1518p, NMC Health down 111p at 2569p, London Stock Exchange Group 198p weaker at 7010p and Informa down 21.6p at 767p.