Pound trades higher on Brexit delay hopes as FTSE 100 sinks into red

The pound strengthened and the FTSE 100 ended in negative territory on the last trading day of the year, with investors gearing up for what is likely to be a tricky 12 months ahead.

Sterling was up 0.6% against the US dollar at 1.278 at the London market close, buoyed by news that a cross-party group of MPs will push for an extension of Article 50 to avoid a calamitous no-deal Brexit.

Versus the euro, the pound gained 0.7% to hit 1.116.

FTSE 100 in 2018
(PA Graphics)

Fiona Cincotta, a senior market analyst at City Index, said: “Put aside to make room for the Christmas dinner, Brexit has been on the back burner for a few days, but as soon as the turkey leftovers are eaten, Parliament will have to face another Brexit vote next month.

“If there is no agreement in January, both Conservative and Labour MPs plan to push for an extension of the March 29 deadline till July to avoid a no-deal Brexit.”

Theresa May’s much derided Withdrawal Agreement will return to the Commons to be voted on within weeks, but the Prime Minister is facing an embarrassing defeat, leaving the future course of Brexit unknown.

The FTSE 100, meanwhile, edged down 5.84 points, or 0.09%, to finish at 6,728.13, despite positive vibes from US President Donald Trump over the weekend on Sino-US trade talks.

It means London’s top flight is £242 billion down compared with its closing price of 7687.77 on December 29 2017.

  • Closed at 6728.13 on December 31
  • Down 959.64 points – 12.48% – compared with December 29 2017 (7687.77)
  • This translates to a loss of around £242 billion
  • Highest point in 2018 was 7877.45, on May 22
  • Lowest point in 2018 was 6585.91, on December 27
  • Last time FTSE 100 closed lower at year end was December 31 2015 (-4.93%)

Among the risers, Ocado capped a rip-roaring year for the supermarket’s shares following a spate of new deals with international retailers keen to use its technology, which includes robots in warehouses.

The online firm has got into bed with US retailer Kroger, Swedish supermarket group ICA, French grocer Groupe Casino and Sobeys in Canada.

Shares ended Monday up 22p at 790p, an increase of more than 100% on their January 1 price of 389p.

On the lower rungs, shares in Sir Martin Sorrell’s new marketing communications venture were on the rise after it reported soaring revenues, as the advertising tycoon continues to take the challenge to his old firm, WPP.

S4 Capital booked a 46% increase in euro sales, gross profit up almost 40% and operating earnings at the MediaMonks agency up nearly 118% in the year to the end of November.

The firm added that it secured two “prestigious” digital content assignments, which will have an impact on next year’s figures.

Shares closed up 1p at 119p.

Shares in Cabot Energy capitulated after the firm said it is fighting for survival and has commenced crunch talks with investors to raise emergency cash that will allow it to stay afloat.

The group said it is in “advanced discussions” with investors for an equity fundraising, the failure of which would jeopardise its ability to operate as a going concern.

The oil and gas company said the fundraising would take place at a deep discount compared with the market price of its shares.

Shares were down 54%, or 0.8p, at 0.7p.

In Europe, Germany’s DAX was up 1.71% and France’s CAC 40 was up 0.9%.

A barrel of Brent Crude was trading at 54 US dollars, a rise of 2.5%.

The biggest risers on the FTSE 100 were Rentokil, up 10.2p at 337.2p, Ocado, up 22p at 790p, Intercontinental Hotels Group, up 93p at 4,237p, and Micro Focus, up 30p at 1,383p.

The biggest fallers on the FTSE 100 were 3i Group, down 22p at 773.4p, British American Tobacco, down 69p at 2,500p, Next, down 57p at 3,991p, and BP, down 6.75p at 495.95p.