(Alliance News) - London's FTSE 100 eked out minor gains on Monday as sterling slumped over a lack of progress in UK-EU Brexit deal talks, while the more domestically-focused FTSE 250 slid over 250 points.
The blue-chip FTSE 100 index closed up 5.16 points, or 0.1%, at 6,555.39. The FTSE 250 ended down 252.96 points, or 1.3%, at 19,929.73, and the AIM All-Share closed up 4.94 points, or 0.5%, at 1,073.82.
The Cboe UK 100 ended up 0.1% at 653.45, the Cboe UK 250 closed down 1.4% at 17,255.01, and the Cboe Small Companies ended down 1.0% at 11,613.19.
"After gains on Friday indices are mostly trading in a more cautious fashion, but in Europe have recouped many of their losses from the morning session, while Wall Street is also attempting to recover lost ground," said IG's Chris Beauchamp.
In European equities on Monday, the CAC 40 in Paris ended down 0.6%, while the DAX 30 in Frankfurt slipped 0.2%.
Beauchamp added: "Since it is December, with seasonal tailwinds and positive inflows still helping, equities might not yet suffer a reckoning, but they do look vulnerable to at least a short-term pullback, with a grey January providing the ideal excuse for a selloff."
London's internationally-exposed FTSE 100 index outperformed peers in Europe on Monday as sterling slumped on Brexit deal jitters.
The UK is prepared to continue post-Brexit trade deal negotiations for "as long as we have time available", Number 10 has said, as talks aimed at breaking the deadlock continue.
UK Prime Minister Boris Johnson's official spokesman said that although time was in "very short supply", Britain would stick at the discussions if an agreement was still possible. But the comments appeared to be at odds with the EU's chief negotiator Michel Barnier, who reportedly told MEPs the deadline for talks succeeding is Wednesday.
At 4pm on Monday, Johnson and European Commission president Ursula von der Leyen will assess whether a deal can be salvaged – their second call in a little over 48 hours.
Edward Moya at Oanda commented: "Hopes for a weekend deal were unrealistic as a deal as both sides need to show that they are fighting for the best possible trade deal. The true deadline will likely be at some point at the end of this week, which could mean a week full of drama could start to weigh on the pound."
The pound tumbled to USD1.3346 at the London equities close Monday, compared to USD1.3470 at the close on Friday.
The euro stood at USD1.2137 at the European equities close Monday, a touch softer versus USD1.2140 at the same time on Friday.
Housebuilders, with a large exposure to the domestic UK economy, were among the biggest fallers in London on Monday amid Brexit worries.
Among the large-caps, Berkeley Group ended down 7.2%, Persimmon down 5.3% and Barratt Developments down 3.5%. FTSE 250-listed Vistry ended 5.2% lower.
The falls for home builders came despite some upbeat house price data. Halifax said UK house prices in November were 7.6% higher than in the same month a year earlier - the strongest growth since June 2016.
Ending at the top of the FTSE 100 was internationally-exposed British American Tobacco, up 4.7%.
Lender HSBC fell 2.6% after being cut to Underperform from Neutral by Bank of America.
In the FTSE 250, Micro Focus surged 14% after Goldman Sachs raised the software firm to Buy from Neutral.
Frasers Group closed down 2.3% after saying it is in negotiations with the administrators of Debenhams' UK business regarding a potential rescue deal for the UK operations of the troubled department store chain.
Mike Ashley's Frasers, which owns department store House of Fraser and sportswear retailer Sports Direct, said that, while it hopes that a rescue package can be put in place, "time is short". In addition, Frasers said the situation is "further complicated" by the recent administration of the TopShop owner Arcadia Group, which is Debenhams' biggest concession holder. Arcadia's brands take out space in Debenhams stores.
IMIMobile rallied 47% to 593.30 pence after agreeing to be taken over by Cisco Systems in a deal that values the AIM-listed cloud communications software firm at GBP543 million.
Cisco Systems Holdings UK, a subsidiary of US networking equipment maker Cisco Systems, is to pay 595p per share for IMImobile, valuing IMImobile's entire share capital at around GBP545 million on a fully diluted basis. IMImobile stock closed at 404.00p on Friday.
IMImobile also reported its interim results, showing a steep profit rise to GBP3.5 million in the six months ended September 30 from GBP1.3 million a year before.
Shares in Cisco - which has a market capitalisation of USD187.61 billion - were flat in New York.
Wall Street, though, was mixed in morning trade. The Dow Jones was down 0.4% and the S&P5 00 down 0.1%, though the Nasdaq Composite rose.
The US on Monday imposed sanctions on 14 senior Chinese officials over Beijing's growing clampdown in Hong Kong. The Treasury Department said it was freezing any US assets and restricting travel of 14 vice chairs of the Standing Committee of the National People's Congress, which spearheaded a tough new security law in the city.
"Gold is breaking out as the Thanksgiving Covid surge appears underway in the US, Trump's administration delivered more sanctions on Chinese companies, and as the dollar resumes its slide. This week, investors have plenty of reasons to pile on safe-haven bets," said Oanda's Moya.
Safe haven assets strengthened amid Monday's cautious mood.
Gold rose to be quoted at USD1,865.82 an ounce at the London equities close Monday against USD1,832.24 at the close on Friday. Against the yen, the dollar was trading at JPY103.94 compared to JPY104.20 late Friday.
Brent oil was quoted at USD49.04 a barrel at the London equities close Monday, largely unchanged from USD49.08 late Friday.
In Tuesday's economic calendar, there is eurozone gross domestic product at 1000 GMT and the ZEW survey due at the same time. In the UK, there are Kantar's latest grocery market share figures at 0800 GMT.
In the UK corporate calendar for Tuesday, first quarter results are due from plumbing and heating products distributor Ferguson and half-year results from equipment rental firm Ashtead Group.
By Lucy Heming; lucyheming@alliancenews.com
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