FTSE 100 falls over cautious gove comments

Traders were left scratching their heads over what to make of the latest comments coming from Brussels and London regarding the ongoing negotiations on an EU-UK trade deal.

As a result, the FTSE 100 closed the day down 19.85 points, or 0.3%, at 6551.06 - unable to keep up the momentum from Wednesday.

Michael Hewson, chief market analyst at CMC Markets UK, explained: “The FTSE100 has slipped back a touch, unable to gain a foothold above the 6,600 level, and subsequently slipping into negative territory on comments from Michael Gove who poured cold water on some of the optimism over the prospect of a Brexit deal by this weekend, saying that it was more likely that we may not get a deal.

“The slightly firmer pound may also be acting as a drag on the margins, though it is also off its highs on Gove’s comments.’’

He added: “The divergence between the comments from EU negotiator Michel Barnier which have been fairly optimistic and the recent comments from Michael Gove are a little hard to square, with what markets are starting to price in.’’

The pound continued to gain strength against the dollar, up 0.72% at 1.361 by markets close and up 0.22% against the euro at 1.11.

The German DAX 30 closed up 0.75% and the French CAC 40 was up 0.03%.

In company news, Upper Crust and Caffe Ritazza owner SSP warned sales are set to plunge by 80% in its first quarter after recording a £425.8m loss over the year to September 30 against pre-tax profits of £197.2m the previous year. Shares closed down 9p at 317.2p.

Outsourcing giant Serco reconfirmed profits are expected to rise 35% to between £160m and £165m thanks, in part, to big wins under the Government’s Test and Trace contracts.

But bosses said it would delay any dividend payment decision, and would hand out £5m in bonuses to staff, alongside repayment of £3m in furlough claims. Shares closed up 3p at 123p.

British Airways has cut more than 15 long-haul routes due to operate next year including Sydney, Bangkok, Kuala Lumpur, Seoul, Calgary, Abu Dhabi and the Seychelles. Parent company IAG saw shares close down 1.3p at 159.7p.

The biggest risers on the FTSE 100 were WPP up 32.8p at 815p; Pearson up 25.2p at 685.4p; Aveva up 121p at 3,301p; Polymetal up 58.5p at 1,711p and Entain up 37p at 1,147p.

The biggest fallers were Vodafone down 5.3p at 125.48p; United Utilities down 26.8p at 926p; Ocado down 62p at 2,220p; Morrisons down 4.45p at 178.7p and Burberry down 43p at 1,827.5p.