Shares and sterling fly on buzz over Brexit deal
BRITISH shares leapt higher yesterday as reports spread that the UK and EU negotiators had signed a Brexit deal.
As traders buzzed with excitement, stocks tied closely to the economy received an extra lift.
Banks, housebuilders and airlines soared. Lloyds Bank climbed 7pc, or 2.43p, to 37.13p, while rival Barclays was up 4pc, or 5.84p, to 151.82p, and Natwest rose 5pc, or 8p, to 166.9p.
At the same time, builder Persimmon rose 4.2pc, or 115p, to 2829p, while fellow giant Barratt surged 4.2p, or 27p, to 676p and Taylor Wimpey ticked up 3.8pc, or 6.1p, to 166.85p.
IAG, the owner of British Airways, also leapt 6.3pc, or 9.55p, higher to 161.8p, helping the FTSE 100 finish 0.7pc, or 42.59 points, up at 6495.75, while the FTSE 250 rose 1.7pc or 347.04 points, to 20,297.76.
The news also sent the pound up more than 1pc against the dollar to $1.3508. It came as investors were also cheering Cairn Energy after the oil and gas firm won a near-£1bn victory against the Indian government.
In a ruling on a long-running case, a tribunal awarded the British firm £900m in damages, plus interest and costs.
The decision sent Cairn surging 22.1pc, or 36.7p, higher to 202.6p.
It follows years of legal wrangling after tax officials demanded that Cairn pay more than £1bn in back taxes in 2014.
The claim related to money supposedly owed on capital gains. But Cairn fought back, seeking international arbitration and sued the government, with a tribunal then held in the Netherlands.
Cairn told investors: ‘The tribunal ruled unanimously that India had breached its obligations to Cairn and has awarded to Cairn damages plus interest and costs, which now becomes payable.’
It is a fresh setback for India after it lost another arbitration case against Vodafone, concerning £1.5bn in back taxes, in September. An Indian government spokesman said it was considering options, which could include an appeal. But that would risk creating more nervousness for foreign firms, lawyers think.
Elsewhere, IT software giant Sage Group edged down 0.8pc, or 4.8p, to 586.8p after it said it was selling its Asia and Australian business for £95m – and has taken a £17m minority stake in cloud software provider Brightpearl.
The firms said they would work together to take advantage of the boom in internet shopping.
Online retailer N Brown rose by 4.3pc, or 2.5p, to 60.7p on its first day of trading since moving from London’s main market to junior counterpart AIM.
The firm, which owns Simply Be, Jacamo and JD Williams, also announced it had successfully raised £100m from selling shares, to invest in the business and pay down debts.
After a tough start to the day for the payments firm Network International, shares bounced back to finish 5.2pc, or 14p, up at 284p.
Investors have shorted roughly 6pc of its stock following its float last year, after scandals that have hit payments industry peers such as Wirecard and Finablr, which both collapsed amid accounting fraud claims.
Those companies both had a significant presence in the United Arab Emirates, as does Network, causing some short sellers to draw parallels.
But analysts at Liberum said there isn’t ‘any basis to read across from the alleged fraud in Wirecard’s UAE operations and those of Network’.
Meanwhile, AIM tiddler Bluejay Mining fell 9.5pc, or 1.35p, to 12.85p after announcing it had struck a distribution deal with a ‘large Asian conglomerate’.