(Alliance News) - Stocks in London ended mixed on Monday, with a rise in financial and housebuilding stocks unable to help the FTSE 100 finish in the green, as the internationally-exposed index was hindered by sterling regaining some strength.
The FTSE 100 index closed down 14.92 points, or 0.2%, at 6,531.83. The domestic-focused FTSE 250 ended up 141.87 points, or 0.7%, at 19,764.02, and the AIM All-Share closed up 6.48 points, or 0.6%, at 1,067.66.
The Cboe UK 100 ended down 0.2% at 651.41, the Cboe UK 250 closed up 0.9% at 17,051.77, and the Cboe Small Companies ended up 0.5% at 11,242.13.
In Paris the CAC 40 ended up 0.4%, while the DAX 30 in Frankfurt ended 0.8% higher.
"The FTSE-100 Index in London is one of the only benchmarks [in] red territory after stock prices have been impacted by sterling gaining strength. The index remains well set above 6,530 points with the target of 6,775 points still in sight," said analysts at ActivTrades.
The pound rose sharply as investors were buoyed by the latest batch of positive headlines in the Brexit saga.
The EU's chief Brexit negotiator Michel Barnier on Monday signalled "some progress" in talks on a post-Brexit trade deal, EU diplomats said, but differences remain on key sticking points.
Barnier updated diplomats from the 27 EU states about the progress which has been made before resuming negotiations with his UK counterpart David Frost.
For months the talks have been deadlocked on the issues of fishing rights and the "level playing field" to ensure that neither side can unfairly compete with the other on environmental standards, workers' rights or state subsidies.
Barnier confirmed that those remain the main issues, telling reporters in Brussels "two conditions are not met yet" but "this deal, it is still possible".
The UK's current trading arrangements with the EU expire at the end of the month, meaning any new deal would have to be in place by January 1.
The pound was quoted at USD1.3340 at the London equities close, up sharply from USD1.3217 at the close Friday.
"The pound has been buffeted by speculation regarding the likelihood of a post-Brexit EU/UK trade deal. This looks set to continue over the coming days with an extension to talks suggesting that there is plenty of room for volatility in the coming days," said analysts at Rabobank.
In the FTSE 100, banks and housebuilders ended in the green after the UK and EU agreed to continue talks on post-Brexit trade.
Natwest Group closed up 5.0%, Barclays up 4.6% and Lloyds Banking Group up 4.9%.
In addition, housebuilders ended higher with Taylor Wimpey up 4.1%, Persimmon up 4.9% and Barratt Developments up 3.8%, with the sector finding further support from Rightmove's upbeat assessment on house prices.
Rightmove said that demand for housing in the UK will outweigh consumer uncertainty in 2021. Prices are expected to grow by a single-digit percentage, though slightly slower than in 2020.
"If the UK economy can avoid a no-deal outcome on January 1, by some magic or an 'extend and pretend' approach from both sides, then the outlook for both banks and housebuilders, today's two big sector winners, is much brighter, or at the very least not as bleak," said IG Group's Chris Beauchamp.
At the other end of the large caps, AstraZeneca ended the worst performer, down 5.7% after the Anglo-Swedish drugmaker on Saturday said it was buying US biotech firm Alexion for USD39 billion to boost its work on immunology. Alexion Pharmaceuticals was up 31% in New York.
Both boards have agreed to the cash-and-stock deal, which values Alexion at USD175 a share, a premium of 45% to the Boston-based company's closing price on Friday in New York of USD120.98. The new acquisition is expected to close in the third quarter of 2021, and Alexion shareholders will own 15% of the combined company.
"There were a few eyebrows raised by the value of the deal as it equates to a 45% premium, which is very generous. Diversification in any business is a sensible move, especially in the pharma game and Astra has been very successful with cancer drugs," said CMC Markets analyst David Madden.
In other M&A activity in London, Codemasters shares ended up 23% to 656.00p after Electronic Arts gatecrashed Take-Two Interactive Software's takeover approach.
Codemasters has agreed to a GBP945 million takeover bid from EA, withdrawing its previous recommendation of the GBP726 million offer made by Two Interactive Software.
In November, American video game company Take-Two Interactive reached an agreement to buy the UK's Codemasters. However, Redwood City, California-based EA's 604p per share cash offer tops New York-based Take-Two's bid of 120 pence per share in cash and 365p in Take-Two shares, valuing Codemasters at 485p per share.
The euro stood at USD1.2130 at the European equities close, up from USD1.2110 late Friday. Against the yen, the dollar was trading at JPY104.00, up from JPY103.90 late Friday.
Stocks in New York were higher at the London equities close as the US marked a historical milestone with the first coronavirus injections beginning to be rolled out across the country.
The DJIA was up 0.6%, the S&P 500 index up 0.5% and the Nasdaq Composite up 1.1%.
The US kicked off a mass vaccination drive Monday hoping to turn the tide on the world's biggest coronavirus outbreak, as the country's death toll neared a staggering 300,000.
A nurse in New York became the first person in the US to be vaccinated when she received the Pfizer-BioNTech shot live on television.
"I feel great. I feel relieved," said Sandra Lindsay, a critical care nurse at the Long Island Jewish Medical Center, imploring all Americans to "to do our part" by getting vaccinated.
Meanwhile, a bipartisan group of lawmakers in Washington are set to formally release a USD908 billion compromise relief package that includes new unemployment aid, help for state and local governments and limited liability protections for businesses.
Brent oil was quoted at USD49.24 a barrel at the equities close, down from USD50.04 at the close Friday.
Gold was quoted at USD1,826.61 an ounce at the London equities close, lower against USD1,843.56 late Friday.
The economic events calendar on Tuesday has China retail sales figures overnight, UK unemployment data at 0700 GMT and US import and export readings at 1330 GMT.
The UK corporate calendar on Tuesday has annual results from London West End landlord Shaftesbury and interim results from online estate agent Purplebricks Group.
By Arvind Bhunjun; arvindbhunjun@alliancenews.com
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