Pound ends week on a high note despite Brexit fears

THE pound rebounded from Brexit uncertainty on Friday to notch up modest gains as the week came to a close.

After dropping below 1.30 US dollars earlier in the day amid political uncertainty, sterling came back to rise 0.19 per cent against the greenback at 1.307. It was also higher versus the euro, climbing 0.18 per cent to 1.151.

Michael Hewson, chief market analyst at CMC Markets, said: “The pound has had a decent week despite the fact that progress on getting any significant changes to the withdrawal agreement seem as far away as ever, and while there was some weakness on reports that there wouldn’t be any so called ‘deal in the desert’ as EU leaders meet in Sharm El Sheikh at the weekend, it proved short lived.

“It is becoming increasingly likely that there will need to be some form of extension whatever happens, irrespective of whether there is a deal or not agreed in the next few weeks.’’

The strengthening pound erased some of the FTSE 100’s earlier gains, meaning the index finished just 11.21 points, or 0.16 per cent, higher at 7,178.6.

News from UK companies included leisure company Merlin’s disposal of its Australian ski resorts business for £95m. The British theme park operator said the sale of Hotham and Falls Creek to US-based Vail Resorts is subject to regulatory approval and is expected to close by June.

Shares in the firm dropped 4.4p to 361.6p.

Publisher Pearson said it expects sales to stabilise this year and return to growth in 2020 as it reported an 18 per cent increase in profits on lower costs. Shares were up 19.6p at the close, reaching 903p.

Shares in Cathedral City owner Dairy Crest gained 85p, or 15.32 per cent, to close at 640p following the news of its £975m acquisition by Canadian firm Saputo.

Under the terms of the deal, Dairy Crest investors will receive 620p per share in cash.

Saputo chairman and chief executive Lino Saputo Jr said: “Dairy Crest is an attractive platform for Saputo and fits well within our growth strategy.

“We believe that under Saputo ownership, Dairy Crest will be able to accelerate its long-term growth and business development potential and provide benefits to Dairy Crest’s employees and stakeholders.

“This recommended offer represents a compelling opportunity for Dairy Crest shareholders, providing immediate value certainty.”

In Europe, the German Dax was up 0.3 per cent while the French Cac gained 0.38 per cent.

Oil prices rose to their highest level for the year so far, amid a more positive mood relating to global trade as the US and China work towards an end to their trade dispute.

A barrel of Brent crude was trading 0.45 per cent higher at 67.24 US dollars.

But Craig Erlam, senior market analyst at Oanda, said the commodity is still being held back.

“Slower global growth, a resurgent dollar and record US production are all weighing on prices and causing any rallies to stall relatively quickly,’’ he said. “It has recovered from its sell-off late last year but not as much as you may have expected and there does seem to be a reluctance to hop on board.’’

The biggest risers on the FTSE 100 were Evraz up 18.8p to 550.2p, Anglo American up 67.2p to 2,057p, Hikma Pharmaceuticals up 54p to 1,703p and Glencore up 8.35p to 308.85p.

The biggest fallers on the FTSE 100 were Barclays down 4.64p to 156.14p, GVC Holdings down 15p to 628p, Kingfisher down 5.4p to 233.6p and Unilever down 65.5p to 4,190p.