(Alliance News) - Stocks in London ended lower on Friday as the lack of concrete progress on the UK securing a Brexit trade deal with the EU continued to frustrate investors.
UK Prime Minister Boris Johnson on Friday warned the prospect of agreeing a trade deal with the EU is "looking difficult", as Brussels' chief negotiator Michel Barnier said there are "just a few hours" left in the Brexit talks.
The PM said the onus is on the bloc seeing "sense" and making a compromise or the transition period will end on December 31 without a deal, which he acknowledged would be "difficult" in the short-term.
"Our door is open. We will keep talking but I have to say that things are looking difficult and there's a gap that needs to be bridged," Johnson said on a trip to Bolton, in northwest England. "We have done a lot to try and help, and we hope that our EU friends will see sense and come to the table with something themselves."
Earlier Friday, the EU's chief negotiator Michel Barnier warned that post-Brexit trade talks were at a "moment of truth" with just hours left to reach an agreement with Britain.
"It's the moment of truth," Barnier told the European Parliament.
Barnier, who headed into last-ditch talks with his UK counterpart David Frost immediately after meeting MEPs, said fisheries remain the main sticking point.
The FTSE 100 index closed down 21.88 points, or 0.3%, at 6,529.18 - ending down 1.1% for the week.
The FTSE 250 ended down 187.80 points, or 0.9%, at 20,108.24 - up 1.8% for the week and the AIM All-Share closed down 0.64 of a point, or 0.1%, at 1,094.36, closing the week up 2.3%.
The Cboe UK 100 ended down 0.5% at 649.14, the Cboe UK 250 also closed down 1.0%, at 17,11.44, and the Cboe Small Companies ended down 0.7% at 11,395.64.
In Paris the CAC 40 ended down 0.4%, while the DAX 30 in Frankfurt ended 0.3% lower.
"It's been a lacklustre end to the week for European markets ebbing back and forth between positive and negative territory as both US stimulus talks and UK-EU trade talks move into the final straits, with both threatening to stretch into the weekend and perhaps beyond, pushing the deadlines, as well as the patience of the markets to the limit," said CMC Markets analyst Michael Hewson.
The pound was quoted at USD1.3482 at the London equities close, down sharply from USD1.3600 at the close Thursday.
Sterling was retreating from two-year highs reached against the greenback on Thursday, with the UK and EU up against the clock to secure a trade deal before the year-end deadline.
"With the Brexit transition period due to end on 31 December, Brexit talks are going to the wire and I wouldn't be surprised if the transition period is extended further out, as after all this is what has been happening repeatedly in recent years. Ultimately, a deal is in the favour of both sides and I still think that they will make a last-minute compromise. Still, whatever probability of a deal was at the start of the week, this has now reduced sharply and is reflected by a slightly weaker pound," commented ThinkMarkets analyst Fawad Razaqzada.
On the London Stock Exchange, Hikma Pharmaceuticals ended the best blue chip performer, up 4.6% after the drugmaker said late Thursday it received approval from the US Food & Drug Administration for its generic version of GlaxoSmithKline's Advair Diskus respiratory illness treatment.
Hikma highlighted it has worked with inhaler drug delivery solutions provider Vectura Group to develop the proprietary dry powder inhaler and formulation technology used to treat asthma. As a result of the approval, Vectura will receive a milestone payment of USD11 million which will be recognised in 2020, and will earn a mid-teen royalty on net sales of the product.
FTSE 250-listed Vectura closed up 6.6%.
At the other end of the large caps, UK banks ended in the red amid no-deal Brexit fears and tighter lockdown restrictions. Lloyds, NatWest and Barclays closed down 3.6%, 3.3% and 0.4% respectively.
Lloyds also took the decision on Friday to cancel staff bonuses.
"The new restrictions and lockdowns are likely to put further pressure on bank margins as we head into next year, and today's move by Lloyds may not be the last, especially if restrictions carry on well into next year and unemployment continues to rise. Both Lloyds and NatWest, more than HSBC and Barclays are much more susceptible to the slings and arrows of the domestic economy due to their lack of investment banking operations," said Hewson.
UK PM Johnson has not ruled out a third national lockdown amid rising rates of coronavirus, as health chiefs warn of the toll on frontline staff and services from festive mixing.
Johnson said rates of infection have increased "very much in the last few weeks", as pressure grows on the government to do more to tackle the rise.
Northern Ireland and Wales are bracing for lockdowns in the days after Christmas, and a senior emergency medicine doctor said the rest of the UK must do "whatever it takes" to get infections under control.
Speaking during a visit to Bolton, Greater Manchester, Johnson was asked whether England would follow Northern Ireland in imposing stringent restrictions after the festive period.
He said: "We're hoping very much that we will be able to avoid anything like that. But the reality is that the rates of infection have increased very much in the last few weeks."
The euro stood at USD1.2235 at the European equities close, down from USD1.2242 late Thursday. Against the yen, the dollar was trading at JPY103.40, up from JPY103.10 late Thursday.
Stocks in New York slipped back from record highs reached on Thursday as investors awaited resolution of a long-stalled economic relief package in Congress, while the US contends with a worsening coronavirus outbreak.
The DJIA was down 0.2%, the S&P 500 index down 0.5% and the Nasdaq Composite down 0.1%.
Congressional leaders say they are close to a deal on a fiscal package, but reports caution that the process could slip into next week as they try to move past disagreements that have stymied progress for months.
US Vice President Mike Pence received a Covid-19 jab on live television Friday as the country prepared to greenlight its second vaccine in a boost to the planet's unprecedented immunisation campaign.
Pence's move comes as inoculation efforts are unfurling around the world in the race to halt a pandemic that has claimed at least 1.66 million lives and infected more than 74 million people.
The event capped the US's first week of a mass vaccination program with the Pfizer/BioNtech jab against a virus that has killed more than 300,000 Americans.
Another vaccine, made by Moderna, is now expected to become the second shot allowed in a Western country after a panel of US experts recommended emergency use approval.
Meanwhile, a devastating cyberattack on US government agencies has also hit targets worldwide with the list of victims still growing, according to researchers, heightening fears over computer security and espionage.
Microsoft said late Thursday that it had notified more than 40 customers hit by the malware which security experts say came from hackers linked to the Russian government and which could allow attackers unfettered network access.
"While roughly 80% of these customers are located in the US, this work so far has also identified victims in seven additional countries," Microsoft president Brad Smith said in a blog post.
The threat comes from a long-running attack which is believed to have injected malware into computer networks using enterprise management network software made by the Texas-based IT company SolarWinds, with the hallmarks of a nation-state attack.
Brent oil was quoted at USD52.16 a barrel at the equities close, higher from USD51.45 at the close Thursday.
"Oil continues to show a greater degree of bullishness than equities, enjoying another healthy bounce this afternoon. The commodity has made up plenty of lost ground since late October, Joe Biden's [election] win paradoxically being a good thing since it signals a more stringent approach to new oil production in the US. Meanwhile, hopes of resurgent demand show no sign of abating, helping to bolster the one-way direction seen over the past six weeks," said IG Group's Chris Beauchamp.
Gold was quoted at USD1,885.75 an ounce at the London equities close, lower against USD1,888.75 late Thursday.
The economic events calendar on Monday has eurozone consumer confidence at 1500 GMT.
There are no events scheduled in the UK corporate calendar on Monday.
By Arvind Bhunjun; arvindbhunjun@alliancenews.com
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