By London’s mid-cap index slipped on Thursday as Britain and the European Union extended the deadline for a Brexit trade deal, while sportswear group Frasers hit a two-week high following an upbeat earnings update.
The domestically focussed FTSE 250, considered a barometer for Brexit sentiment, shed 0.4% as Prime Minister Boris Johnson and the EU’s chief executive gave themselves until Sunday to seal a new pact and avoid a tumultuous Brexit in three weeks’ time.
The exporter-heavy FTSE 100 rose 0.3% as the absence of a trade deal pressured the pound.
“Given how far apart the two sides appear to be, you’d have to be an eternal optimist to think (a deal would be possible),” said Michael Hewson, market analyst at CMC Markets UK.
“Yet, we have a deadline looming that really ought to concentrate the minds of both sides to avoid a no-deal outcome.”
A raft of stimulus has helped the FTSE 250 rally about 60% since it slumped to a seven-year low in March, but the index is still down about 9% on the year on fears about the double economic whammy from a no-deal Brexit and the COVID-19 pandemic.
Latest data showed Britain’s economic recovery almost ground to a halt in October, while another report warned the domestic economy was unlikely to return to its pre-COVID-19 size until the end of 2022.
“October’s GDP figures may be ‘old news’, but the sharp fall in the hospitality sector output gives a flavour of what is likely to be happening now,” ING economist James Smith said, adding he expects UK GDP to end the year about 9%-10% below pre-pandemic levels.
In company news, Mike Ashley’s sportswear group Frasers jumped 8.8% after reporting a 25% rise in first-half core earnings.
Online supermarket Ocado Group fell 3.2% even as it raised its core earnings forecast for 2019-20 for the second time in two months.
(Reporting by Sagarika Jaisinghani in Bengaluru; Editing by Arun Koyyur)
Source: Reuters
