Sterling under pressure despite Government efforts to reboot Brexit talks
The FTSE 100 Index fell 11.47 points to 7,327.5.
Sterling was still suffering under the weight of political uncertainty on Tuesday despite an intensive effort from Prime Minister Theresa May to reboot Brexit talks.
The pound was 0.2% lower versus the US dollar at 1.34, but had picked up from the lows seen earlier in the session after Brexit secretary David Davis insisted Northern Ireland would not be “left behind” in the single market and customs union after Brexit.
The UK currency was enjoying a stronger session against the euro up 0.2% at 1.13, while the FTSE 100 Index fell 11.47 points to 7,327.5.
The Irish premier Leo Varadkar said “the ball is now in London’s court”, after Mrs May pulled out of a proposed deal when the Democratic Unionist Party (DUP) made clear it would not accept proposals for “regulatory alignment” with the Republic.
Connor Campbell, Spreadex financial analyst, said: “David Davis’ suggestion that the post-Brexit ‘regulatory alignment’ sought for Northern Ireland and the EU would apply to the UK as a whole seems to have lifted the pound from its lows this Tuesday.”
Across Europe, Germany’s Dax was up 0.2% and the Cac 40 in France dropped by 0.3%.
On the oil markets, Brent crude was 1% higher at 63.06 dollars as it rebounded from a slump in the previous session when investors reacted to a jump in the US oil rig count.
In UK stocks, British supermarkets were sitting among the biggest risers following a broker upgrade from Goldman Sachs.
Shares in Tesco were up 5.9p to 201p, while Sainsbury’s rose 6.4p to 239.3p and Morrisons climbed 4.8p to 218.8p.
David Madden, market analyst at CMC Markets, said: “Goldman Sachs wrote an optimistic note about the UK supermarket sector, and in turn we have seen a push higher in the share price of Sainsbury’s, Tesco and Morrisons.
“The investment bank stated that Adli and Lidl are no longer as aggressive as they once were when it comes to slashing their prices.
“Goldman Sachs predicts that profit margins will improve next year, as they feel the gap between consumer prices for foods and input costs are falling.”
However, this boost to the London market was cancelled out after the mining giants took a tumble in response to a drop in the copper price.
Anglo American was the biggest faller, dropping 34p to 1,351p, as Glencore sank 7.8p to 334p.
Plumbing supplier Ferguson was also down after a challenging UK market dragged on its performance in the first quarter.
The group, formerly known as Wolseley, reported a 10% rise in revenue to 5.2 billion US dollars (£3.8 billion) in the three months to October 31, while trading profit was up 14% to 394 million US dollars (£293 million).
But in the UK, despite revenue growing 3.4% to 679 million US dollars (£506 million), profit came in 3.8% lower at 21 million US dollars (£15.6 million).
This contrasted to the US, Canada and Central Europe, where profit rose.
Shares dropped 1%, or 60p to 5,420p.
The biggest risers on the FTSE 100 Index were Standard Chartered up 22p to 749.2p, Tesco up 5.9p to 201p, Sainsbury’s up 6.4p to 239.3p, Whitbread up 99p to 3,710p.
The biggest fallers were Anglo American down 34p to 1,351p, Glencore down 7.8p to 334p, St James’s Place down 25p to 1,175p, Rio Tinto down 71.5p to 3,468.5p.