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Stronger pound weighs on FTSE 100 as Brexit talks set to continue

10/14/2020 | 12:11pm

(Reuters) - The FTSE 100 slipped on Wednesday as signs of progress in Brexit talks boosted sterling, putting pressure on companies that are big exporters, while a clutch of upbeat corporate earnings limited declines.

The export-heavy FTSE 100 ended 0.6% lower on declines in pharmaceutical <.FTNMX4570> and bank <.FTNMX8350> stocks.

The mid-cap FTSE 250, considered a barometer for Brexit sentiment, added 0.3% after sources and documents said the European Union and Britain were set to continue negotiations on a Brexit trade deal beyond an Oct. 15 deadline set by Prime Minister Boris Johnson.

"The fact that talks are going to continue suggests there is appetite on both sides for a deal and removes a certain amount of anxiety because there is no immediately pressing deadline to worry about," Connor Campbell, financial analyst at Spreadex, said.

After riding a global surge in equity markets on hopes of more stimulus, the FTSE 100 has come under pressure this week on growing domestic political frictions about new coronavirus restrictions to contain a surge in infections.

Johnson on Wednesday resisted a national lockdown and said he would stick to his localised approach, responding to opposition leader Keir Starmer's demand for a temporary national shutdown.

In company news, money manager Ashmore Group Plc jumped 7.7% after the company said a rise in assets under management during the first quarter more than offset net outflows.

London-listed shares of Just Eat Takeaway.com NV rose 6.4% as the food-ordering company reported a 46% jump in its orders during the third quarter.

Britain's biggest homebuilder, Barratt Developments Plc gained 1.7% after posting a near 17% jump in forward sales for the past three months, helping the broader sectoral index <.FTNMX3720> gain 0.3%.

But online fashion retailer ASOS Plc tumbled 10.3% as it said it was cautious on the outlook for consumer demand.

(Reporting by Devik Jain in Bengaluru; Editing by Rashmi Aich/Uttaresh.V/Jane Merriman)

By Devik Jain

© Reuters 2021
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