FTSE 100 hits highest since March on Brexit trade deal cheer

In its first day of trading after the deal, the blue-chip FTSE 100 index gained 2.6 per cent and was set for its best day since November 9. — Reuters pic
In its first day of trading after the deal, the blue-chip FTSE 100 index gained 2.6 per cent and was set for its best day since November 9. — Reuters pic

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LONDON, Dec 29 — Britain’s FTSE 100 hit its highest since early March today as investors returned from a long weekend to cheer a post-Brexit trade deal that averted a chaotic exit from the European Union.

In its first day of trading after the deal, the blue-chip FTSE 100 index gained 2.6 per cent and was set for its best day since November 9.

Drugmaker AstraZeneca rose 4.7 per cent to give the biggest boost to the FTSE 100, while shares in other international firms such as Unilever and Diageo gained despite a firmer pound.

“The deal should see sentiment towards the FTSE indices recover just as the dividend payout ratio improves, vaccines are rolled out and overseas revenues accelerate. We lift UK equities to Bullish,” analysts at brokerage Jefferies wrote in a note.

The coming days will provide a first taste of the effects of Brexit and regulators on both sides of the English Channel will be on alert for market dislocations on January 4, the first trading day of the new year.

“The honest answer is we do not know what January 1st will hold. In all likelihood, there will be delays and bedding-in period as the new reality and processes are explored and enacted,” said Jeffrey Halley, senior market analyst at OANDA.

The deal would ensure the goods trade that makes up half of the annual EU-UK commerce remains free of tariffs beyond December 31.

The domestically focused FTSE 250 index climbed 1.9 per cent to its highest level since February 25.

In company news, e-commerce firm Hut Group rose 5.4 per cent after saying it would buy US online retailer Dermstore from Target Corp for US$350 million (RM1.4 billion) in cash.

British insurer Admiral gained 3.0 per cent after reports of Zoopla Property Group buying its Penguin Portals and Preminen businesses. — Reuters

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