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(Alliance News) -Â The FTSE 100 outperformed on Friday as Brexit talks went down to the wire, putting a damper on sterling's rally this week, while the more domestically focused FTSE 250 slipped.
"The FTSE 100 is welcoming its international positioning, with the index pushing higher off the back of a sharp decline in sterling in early trade. This week has seen a notable air of optimism from those around Brexit talks. yet as we enter a critical weekend of talks it seems that all the focus is on highlighting just how real the threat of no-deal is," said Joshua Mahony, senior market analyst at IG.
The FTSE 100 index was up 11.88 points, or 0.2%, at 6,562.94 midday Friday. The mid-cap FTSE 250 index was down 7.13 points at 20,288.91. The AIM All-Share index was up 0.2% at 1,096.85.
The Cboe UK 100 index was up 0.1% at 653.29. The Cboe 250 was down 0.1% at 17,564.33, and the Cboe Small Companies down 0.5% at 11,411.30.
Chief EU negotiator Michel Barnier has warned that post-Brexit trade talks are at a "moment of truth" with just hours left to reach an agreement with Britain.
Barnier, who headed into last-ditch talks with his UK counterpart David Frost immediately after meeting MEPs, said fisheries remain the main sticking point.
Late on Thursday, UK Prime Minister Boris Johnson and European Commission President Ursula von der Leyen held a call that failed to break the logjam in trade talks. The clock is ticking down to the year-end, when the Brexit transition period expires and Britain leaves the EU single market.
The pound was quoted at USD1.3540 on Friday, falling back significantly from USD1.3600 at the London equities close on Thursday. It is still up around 2.4% since the start of the week, however.
Sterling hit a high of USD1.3626 on Thursday - its best price since May 2018 - as hopes mounted that the two sides would reach agreement in the coming days.
Craig Erlam at Oanda said the pound's retreat on Thursday is "nothing compared to what we'll see if talks collapse over the weekend".
In mainland Europe, the CAC 40 in Paris and the DAX 30 in Frankfurt were both 0.1% higher on Friday. The euro traded at USD1.2259, higher than USD1.2242 late Thursday.
The other political tussle firmly at the forefront of investors' minds is that in Washington, over further US government stimulus.
Republican Senate leader Mitch McConnell on Thursday was optimistic and repeated his pledge to keep lawmakers in Washington until there is an agreement.
"I am heartened by our discussions and our progress. I believe all sides are working in good faith toward our shared goal of getting an outcome," he said in a statement, noting that that the package would include direct payments to Americans.
Democratic leaders House Speaker Nancy Pelosi and Senator Chuck Schumer held talks with Treasury Secretary Steven Mnuchin late into the night Wednesday, and were due to speak again early Thursday, Pelosi's deputy chief of staff Drew Hammill said on Twitter.
Wall Street is on course for a subdued start as markets eye developments on Capitol Hill. The Dow Jones is called flat, the S&P 500 up 0.1% and the Nasdaq broadly unchanged.
Gold was quoted at USD1,880.40 an ounce on Friday, down from USD1,888.75 on Thursday. Brent oil was trading at USD51.37 a barrel, soft on USD51.45 late Thursday.
Against the yen, the dollar strengthened to JPY103.35 versus JPY103.10.
In London, Hikma Pharmaceuticals was the top blue-chip performer at midday, rising 3.5% after late Thursday saying it has received approval from the US Food & Drug Administration for its generic version of GlaxoSmithKline's Advair Diskus drug.
The regulator gave Hikma the all-clear to launch 100 microgram, 50 microgram and 250 microgram and 500 microgram doses for the asthma treatment in the US.
The Jordan-founded drugmaker highlighted it has worked with inhaler drug delivery solutions provider Vectura Group to develop the proprietary dry powder inhaler and formulation technology.
Vectura rallied 4.9% in the FTSE 250. Glaxo was up 0.7%.
Towards the other end of the FTSE 100 was Flutter Entertainment, down 1.5% after on Thursday saying the Kentucky Supreme Court in the US has reinstated an award of damages against subsidiaries of the gaming firm's Stars Group business, made in 2015.
The Kentucky Court of Appeals in 2018 had voted in favour of Stars, discarding the massive penalty that had been imposed by a trial court judge in December 2015 for alleged losses incurred by Kentucky residents who played real-money poker on PokerStars between 2006 and 2011.
Flutter, which merged with Canada's Stars Group earlier this year, said the 2015 ruling had subsequently been vacated in its entirety by the Kentucky Court of Appeals in 2018. The outcome of Thursday's Kentucky Supreme Court ruling, it noted, is that the USD870 million judgement against Stars has been reinstated, with compounding interest of 12% per year.
Flutter said gross gaming revenues that Stars generated in Kentucky during the period were around USD18 million and having taken legal advice, Flutter said it is confident that any amount it ultimately becomes liable to pay will be a limited proportion of the reinstated judgement.
Restaurant Group lost another 3.5% as it warned that UK virus restrictions make the outlook for the start of next year "extremely challenging".
"As per the latest tiering restrictions announced by the UK government, the group will have approximately 145 sites which will trade for dine-in across the UK, 142 sites which will provide delivery and takeaway services only, with the remaining 103 sites closed," said Restaurant Group.
The Wagamama pan-Asian dining chain owner said the tiering restrictions make the outlook for the first quarter of 2021 seem "extremely challenging", and will have a "significant adverse impact" on the group and the wider hospitality sector if they remain in place throughout the period. Despite this, it is encouraged by progress made in terms of the Covid-19 vaccine.
Restaurant Group shares down 60% so far this year.
On AIM, Synairgen jumped 32% on a fast track designation from the US Food & Drug Administration for Covid-19 treatment SNG001.
This has enabled the respiratory drug discovery and development company based in Southampton, England to initiate its phase III SG018 trial in the US and shorten its review times with the FDA. Dosing is expected to start imminently in the UK, it said.
By Lucy Heming;Â lucyheming@alliancenews.com
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