Trade deal jitters leaves markets uneasy

Traders continued to worry over the lack of a trade deal between the UK and the EU.

Investors have always remained cautious that a no-deal Brexit could have serious implications – borne out by Office for Budget Responsibility forecasts that a no-deal situation could wipe 2% off GDP in 2021.

But this has typically been played out in the currency markets, and Tuesday was no exception.

During stock market trading hours, the pound fell by 0.6% at points, although reassurances from the UK Government that it will not break international law over Northern Ireland protocols helped the falls ease.

As the FTSE 100 closed for the day, the pound was down 0.12% against both the dollar and the euro, worth 1.336 dollars and 1.103 euros respectively.

David Madden, an analyst at CMC Markets UK, said: “The major indices are mixed as uncertainty is circulating with respect to the UK-EU trade situation.

“As a gesture of good faith, the UK will withdraw controversial elements of the Internal Markets Bill so that should help create an environment for a potential deal to brokered.

He added: “The mood in the markets today has been subdued as tomorrow will be the main focus of the UK-EU trade talks, most likely.”

Even the historic first vaccination of a patient against Covid-19 failed to enliven the mood and the FTSE 100 closed up just 3.43 points, or 0.05%, at 6558.82.

The German DAX was up 0.2% and the French CAC down 0.23%.

In company news, SSE and National Grid enjoyed small bumps in their share prices, closing up 39.5p at 1,403p and 12.2p at 872.2p respectively.

Both were buoyed by energy regulator Ofgem’s decision to not slash the money that energy networks can give to their shareholders by as much as first indicated.

Ferguson shareholders appeared unconcerned by news from the the plumbing and heating giant that plans to spin off UK arm Wolseley remain uncertain.

Shares closed up 26p at 8,506p.

Online shopping firm Studio Retail Group – formerly Findel – put itself up for sale on Tuesday, with investors keen on the idea as shares soared 14% at points.

The company, which counts Mike Ashley’s Frasers Group empire as its biggest shareholder, said the plan was part of a strategic review. Shares cooled but still closed up 13p, or 4.9%, at 276p.

Insolvency specialists Begbies Traynor said protections for companies during the Covid-19 pandemic had staved off a surge in business, but it was ready to step up once the rules come to an end next year.

Shareholders were disappointed by the news, despite the company saying full year results are expected to “at least” be in line with expectations.

Shares closed down 3.4p at 90p.

And retailer Joules shareholders were disappointed by revenues for the six months ending November 29, falling 15.3% year-on-year to £94.5 million. Shares closed down 5p at 165p.

The biggest risers on the FTSE 100 were DS Smith up 13.4p at 362p; Experian up 90p at 2,772p; Intertek up 186p at 5,886p; 3i Group up 33p at 1,160.5p and SSE up 39.5p at 1,403p.

The biggest fallers were IAG down 6.05p at 161.2p; Intercontinental Hotels down 177p at 4,776p; Rolls-Royce down 4.6p at 126.25p; HSBC down 11.15p at 400.4p and Berkeley Group down 116p at 4,305p.