FTSE 100 sinks ahead of Brexit talks and US presidential debate
The FTSE 100 lost momentum today as rising coronavirus cases kept investor sentiment subdued ahead of the next round of Brexit negotiations and the first US presidential debate.
The blue-chip index had slipped 0.72 per cent by lunchtime after following global stocks higher yesterday in a so-called relief rally.
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Banking stocks declined the most strongly following gains in yesterday’s session. The mid-cap FTSE 250 also lost ground, falling 0.88 per cent by 12.30pm.
Blue-chip plumbing parts distributor Ferguson led the FTSE 100 climbers, rising as much as 6.55 per cent after announcing plans to resume its dividend despite the impact of Covid-19.
Cost-reduction measures, including job cuts and branch closures, and resilience in the group’s main US business helped it report a 4.1 per cent rise in annual profit.
The FTSE 100’s European peers also lost ground. Germany’s DAX slipped 0.67 per cent soon after the open, while France’s CAC 40 shed 0.38 per cent.
Sterling hit a one-week high against the dollar this morning as three days of Brexit negotiations begin in Brussels.
Talks between Britain and the EU on a joint legal text of trade agreement, which will also cover energy links and transport, are set to last until Friday morning.
Sterling was trading 0.4 per cent higher at $1.2878 by mid-morning, but had slipped back to 0.13 per cent higher at $1.2853 by lunchtime.
Most other currencies, including the euro and the yen, were weaker against the dollar.
“This week is a very, very important week for the pound as we slowly grind toward the day of true Brexit,” said MUFG analysts.
“In negotiations and given the political capital that (Prime Minister Boris) Johnson is losing in the fight against Covid-19 we see the balance as having shifted more in favor of a deal,” they added.
Investors around the world are also looking ahead to tonight’s US Presidential debate between President Donald Trump and his rival Joe Biden.
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Asian markets put in a mixed performance overnight after Wall Street recovered some of the month’s losses yesterday as investors rushed to buy up cut-price shares in beaten-down sectors.
The Shanghai Composite index gained 0.21 per cent, and in Japan the Nikkei added 0.12 per cent. Hong Kong’s Hang Seng index shed 0.89 per cent.