Brexit news boosts sterling but Footsie sees red

THE pound rallied to its highest level in almost two years yesterday on expectations Britain’s impending departure from the European Union could be delayed.

Sterling rose 0.73 per cent versus the euro hitting a 21-month high of 1.162.

Against the US dollar, the pound grew 0.69% to 1.312, reaching a four-week high.

The British currency was buoyed by news that exit from the bloc could be pushed past the March 29 deadline.

Prime Minister Theresa May said if her deal is rejected next month MPS will vote on two proposals by March 13 on whether the country leaves the EU without a deal or delays Brexit.

David Madden, market analyst at CMC Markets, said: “Sterling reacted well to the news as the chances of the UK leaving without a deal seem to have diminished.”

Meanwhile, the FTSE 100 was in the red due to the stronger pound and rebounded from highs yesterday following bullish sentiment over Us-china trade talks.

London’s top index closed 32.62 points lower, or 0.45%, at 7,151.12, while Germany’s DAX rose 0.39% and France’s CAC grew 0.27%.

Mr Madden said: “Stock markets were firmly in the red, but European markets have pulled back most of their losses.”

In corporate news, Marks & Spencer confirmed it is in talks with Ocado over a possible joint venture, following weeks of speculation.

The retailer said there was no certainty that the discussions would result in an agreement, and there was no guaranteed timescale.

M&S shares closed up 9.5p to 303.2p and Ocado was up 103.8p to 990p.

Metro Bank announced plans to raise £350 million through a new share sale as it looks to plug a shortfall linked to an accounting error that saw nearly 40% wiped off its value in one day.

The lender said it has entered into a “standby underwrite agreement” with RBC Capital Markets, Jefferies and KBW for the equity raise.

Metro shares were down 243p to 1,300p.

The competition regulator waded into the proposed takeover of Provident Financial by Non-standard Finance (NSF), as it mulls whether to investigate.

NSF has made a £1.3 billion approach for doorstep lender Provident, but was rebuked by the company’s management on Monday.

Provident shares increased by 6.6p to 603.4p.

Brent crude, the international benchmark, traded up 0.91% at 65.31 US dollars (£49.26).

The biggest risers on the FTSE 100 were Ocado up 103.8p to 990p, Barclays up 5.68p to 164.9p, GVC Holdings up 23p to 670p, and Next up 174p to 5,200p.

The biggest fallers were Fresnillo down 81.4p to 894.6p, International Consolidated Airlines Group down 28p to 617p, Croda down 179p to 4,881p, and BT down 7.4p to 220p. WALL Street’s three major indexes fell slightly after a choppy session yesterday as investors eyed mixed US economic data and waited for clarity on issues such as the Us-china trade talks.

Weaker-than-expected housing data contrasted with a rosy consumer confidence report, while Home Depot Inc was among the biggest drags on the benchmark S&P 500 index after the home improvement retailer blamed bad weather for missed Wall Street forecasts.

Caterpillar Inc fell 2.4 per cent after UBS downgraded the stock to “sell” from a “buy” rating.

Federal Reserve chairman Jerome Powell told a Senate banking committee that the central bank would remain “patient” in deciding on further interest rate hikes and that rising risks and recent soft data should not prevent solid growth for the economy this year.

The indexes have already been bolstered in recent weeks by trade optimism and doveish signals from the Fed, with the S&P 500’s session high just 4.7% away from its record closing high in September.

“Investors are a little tentative as far as chasing the market higher. They’re waiting for better prices or better news,” said Michael O’rourke, chief market strategist at Jones Trading in Greenwich, Connecticut.

The Dow Jones fell 33.97 points to 26,057.98, the S&P 500 lost 2.21 points to 2,793.9 and the Nasdaq Composite dropped 5.16 points to 7,549.30.