MARKET REPORT

sion.barry@walesonline.co.uk STERLING surged after Britain and the EU finally reached agreement on a transition deal that will allow talks on the future trade relationship to begin later this week.

The pound jumped over a cent to $1.404 and climbed 0.4% against the euro to €1.138 as traders interpreted the agreement - which will see the UK abide by EU laws for the 21-month post Brexit period as positive for the British economy.

Fiona Cincotta, senior market analyst at City Index, said the deal “removes a layer of uncertainty for UK businesses”.

However she cautioned: “The transition deal, whilst perhaps the most positive piece of news for the pound since the Brexit referendum, is not an all-winning solution.

“The transition deal itself remains dependent on a Brexit deal being reached and although this is clearly a step in the right direction, it is by no means a guarantee.”

The FTSE 100, meanwhile, had a bruising day, ending down 1.69%, or 121.21 points, at 7,042.93, as software group MicroFocus dragged the index lower after its shares went into freefall.

The company’s stock crashed 46% to 1,011p after seeing its chief executive quit and warning over sales.

MicroFocus said annual revenues were falling at a faster rate than previously expected after being confronted by lower licensing income, adding that boss Chris Hsu was quitting to “pursue another opportunity”, six months after taking the role.

Miners Glencore, Anglo American, Rio Tinto and BHP Billiton also ended the day in the red as weak metal prices weighed on the top flight.