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London midday: Stocks tick higher as sterling falls on Brexit worries

By Michele Maatouk

Date: Wednesday 02 Dec 2020

London midday: Stocks tick higher as sterling falls on Brexit worries

(Sharecast News) - London stocks had ticked a little higher by midday on Wednesday, helped along by a weaker pound, as UK approval of Pfizer's Covid-19 vaccine for rollout next week failed to provide any meaningful boost to markets.
The FTSE 100 was up 0.2% at 6,397.69, faring a bit better than its European counterparts as sterling fell 0.5% against the dollar to 1.3355 after the EU's Brexit negotiator, Michel Barnier, indicated that a no-deal scenario was likely.

A weaker pound tends to boost the top-flight index, as around 70% of its constituents derive most of their earnings from overseas.

IG market analyst Joshua Mahony said: "Unfortunately today has seen some of the heat taken out the housebuilders after a welcome boost yesterday, with Brexit fears ensuring a significant degree of hesitancy despite the sharp appreciation in house prices this year.

"The pound has been hit hard on the news that Michel Barnier has notified the EU27 that a no-deal scenario is looking increasingly likely. While traders have largely taken running commentary with a pinch of salt thus far, the growing fear of a disorderly exit at the end of the month is likely to drag on the pound in the absence of a deal. With three issues remaining for negotiators to overcome, it seems we have reached a standstill in talks at a critical time. Nevertheless, there is hope for Brexit talks yet, although talk of a 'tunnel' seems to have been mistaken.

"The UK has become the first nation to approve a coronavirus vaccine after regulators gave the green light for the health service to begin vaccinations with the Pfizer jab next week. This marks a moment in history as the tide is gradually turned against a virus which has reversed the trend of globalisation for much of 2020. With the UK obtaining 100 million doses of the Pfizer vaccine, there is a hope that a significant chunk of the population can be treated over the coming months."

In equity markets, precious metals miner Fresnillo shone as gold prices advanced.

Security services firm G4S surged after Canada's GardaWorld lifted its offer for the company to 235p a share, valuing it at £3.68bn. The new, and final, offer is a premium on Tuesday's closing price of 229p.

Housebuilders were among the worst performers, having rallied on Tuesday on the back of upbeat data from mortgage lender Nationwide, dented by worries about a no-deal Brexit. Barratt, Taylor Wimpey, Berkeley and Persimmon were all weaker.

Sainsbury's was the worst performer on the FTSE 100 after rival Tesco said it would repay £585m of Covid-19 business rates relief to the UK after Britain's supermarkets came under pressure to return the money. The supermarket chain said it had used all the money to respond to the pandemic but that its business had proved resilient.

The company's move will put pressure on Sainsbury's, Morrisons and other supermarkets that have paid dividends during the crisis to repay business rates relief.

Avon Rubber slumped despite posting better-than-expected full-year results.

Workspace provider IWG was under the cosh after saying it would raise £300m in a convertible bond issue to help pay for a string of planned acquisitions at attractive prices.

Market Movers

FTSE 100 (UKX) 6,397.69 0.20%
FTSE 250 (MCX) 19,768.18 -0.39%
techMARK (TASX) 3,955.90 -0.14%

FTSE 100 - Risers

Fresnillo (FRES) 1,143.00p 2.51%
Associated British Foods (ABF) 2,230.00p 2.43%
Coca-Cola HBC AG (CDI) (CCH) 2,236.00p 2.38%
BT Group (BT.A) 125.40p 1.91%
BHP Group (BHP) 1,787.80p 1.75%
London Stock Exchange Group (LSE) 8,114.00p 1.55%
HSBC Holdings (HSBA) 411.90p 1.43%
United Utilities Group (UU.) 925.20p 1.40%
BP (BP.) 258.10p 1.20%
Smurfit Kappa Group (SKG) 3,320.00p 1.16%

FTSE 100 - Fallers

Sainsbury (J) (SBRY) 208.80p -3.38%
Avast (AVST) 470.00p -3.13%
Berkeley Group Holdings (The) (BKG) 4,781.00p -2.21%
B&M European Value Retail S.A. (DI) (BME) 478.10p -2.17%
Persimmon (PSN) 2,780.00p -2.08%
Taylor Wimpey (TW.) 162.65p -2.05%
Tesco (TSCO) 224.80p -1.79%
Morrison (Wm) Supermarkets (MRW) 179.60p -1.75%
Kingfisher (KGF) 276.90p -1.74%
Smiths Group (SMIN) 1,484.00p -1.72%

FTSE 250 - Risers

G4S (GFS) 247.80p 8.21%
Cineworld Group (CINE) 65.00p 4.84%
SSP Group (SSPG) 354.60p 3.74%
Hochschild Mining (HOC) 237.40p 3.31%
BMO Commercial Property Trust Limited (BCPT) 76.40p 2.55%
Domino's Pizza Group (DOM) 319.80p 2.50%
WH Smith (SMWH) 1,550.00p 2.24%
Aston Martin Lagonda Global Holdings (AML) 74.50p 2.05%
Watches of Switzerland Group (WOSG) 503.00p 2.03%
Provident Financial (PFG) 302.40p 2.02%

FTSE 250 - Fallers

IWG (IWG) 327.40p -6.88%
Rank Group (RNK) 142.40p -6.68%
CMC Markets (CMCX) 379.00p -4.77%
Hiscox Limited (DI) (HSX) 1,048.50p -4.46%
Avon Rubber (AVON) 4,430.00p -4.22%
Virgin Money UK (VMUK) 136.70p -3.56%
Energean (ENOG) 699.70p -3.14%
Beazley (BEZ) 370.40p -2.68%
Trainline (TRN) 468.00p -2.66%
Network International Holdings (NETW) 271.00p -2.66%

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