LONDON MARKET CLOSE: FTSE Win Streak Snapped Despite Astra Jab Boost

(Alliance News) - European stocks slipped into the red on Wednesday afternoon, with international earners weighing on the FTSE 100 after a boost from the agreed post-Brexit trade deal and latest promising vaccine news waned.

The blue-chip FTSE 100 index closed down 46.83 points, or 0.7%, at 6,555.82.

The large-cap index ended in the red for the first time since last week Monday, when it shed 0.6%. The FTSE 100 has risen 2.2% since then amid hopes, and then the eventual confirmation, of a post-Brexit trade deal.

The mid-cap FTSE 250 ended down 182.48 points, or 0.9%, at 20,715.11.The AIM All-Share closed up 3.34 points, or 0.3%, at 1,153.26.

The Cboe UK 100 ended down 0.8% at 652.67, the Cboe UK 250 lost 0.7% at 18,169.59, and the Cboe Small Companies ended up 0.1% at 11,762.50.

In Paris the CAC 40 ended down 0.2%, and the DAX 30 in Frankfurt ended down 0.3% after an abbreviated session.

Financial markets in France and the UK close early on Thursday for New Year's Eve. Financial markets in Germany are closed.

Boris Johnson's EU trade deal has cleared the House of Commons, as the government seeks to rush approval through Parliament in a single day.

After little over four hours' debate, MPs voted by 521 to 73 to give the EU (Future Relationship) Bill, ratifying the deal finally agreed on Christmas Eve, a third reading.

The bill now goes to the House of Lords, where the debate is expected to continue until around 2230 GMT on Wednesday.

If, as expected, it passes the upper chamber, it will then go to the Queen for royal assent, with an announcement expected around midnight.

That would pave the way for the deal to take effect at 2300 GMT on Thursday when the current Brexit transition period, during which the UK has continued to follow EU rules, ends.

The pound was quoted at USD1.3593 at the London equities close on Wednesday, up from USD1.3509 on Tuesday. The euro stood at USD1.2287 at the European equities close, up from USD1.2246.

Against the yen, the dollar was trading at JPY103.30, down from JPY103.51 at the early London equities close on Tuesday.

"UK stocks are on the back foot despite the passing of the Brexit Bill, putting to bed fears of a no-deal Brexit when the UK leaves the EU on Thursday night. Unfortunately it appears to be the case of a buy-the-rumour, sell-the-fact scenario," IG Senior Market Analyst Joshua Mahony said.

International earners were among the blue-chip stocks that ended in the red in London. Imperial Brands, Diageo and Intertek ended down 1.2%, 1.8% and 2.2% respectively.

News of a post-Brexit trade deal lifted many of the FTSE's globe-spanning, dollar earners.

Diageo has risen 2.0% and Imperial Brands 0.6% and Intertek 0.2% since last week Wednesday, the day before the deal was announced.

The UK's fight against Covid-19 was given a shot in the arm, after regulators gave a green light to the AstraZeneca-Oxford vaccine.

The FTSE 100 Anglo-Swedish drug manufacturer said the first doses will be released Wednesday in order for vaccinations to start early in the new year.

AstraZeneca shares closed down 0.8%, giving back some of Tuesday's 3.3% gains.

The UK approved the vaccine on the same day millions more people were plunged into the toughest Tier 4 lockdown restrictions.

UK Health Secretary Matt Hancock announced in the Commons that far more parts of the country are now entering Tier 4 than before, with most other areas moving to Tier 3.

The Midlands, parts of the North East and North West and parts of the South West are among those areas escalated.

Under the Tier 4 rules, non-essential shops – as well as gyms, cinemas, casinos and hairdressers – have to stay shut.

"With the government shifting a further 20 million people into Tier 4 tomorrow, 78% of the country will be operating under restrictions that severely hinder economic activity. With a record 53,000 new cases yesterday, the UK remains on a sharp upward trajectory with no sign of turning the corner. The fear is that without a swift reversal in cases, there is a strong chance that the government either lengthens or tightens restrictions further," Mahony added.

Soft drinks and alcoholic mixers firm Britvic ended down 0.5%. Tougher restrictions mean more pubs and bars are forced to close, a blow to firms such as Britvic which generate large portions of their earnings from on-trade venues.

NatWest rose 1.4%, the best performing FTSE 100 stock. Banking stocks had slipped on Tuesday amid uncertainty over future implications of the UK's Brexit deal on the financial services sector.

In New York, JPMorgan Chase and Goldman Sachs, who both employ thousands in London, were up 0.4% and 0.6% respectively in New York after ending in the red on Tuesday,

On Wall Street on Wednesday, the Dow Jones Industrial Average was up 0.6% and the S&P 500 Index climbed 0.4%. The Nasdaq Composite was also 0.4% higher.

Wall Street had dipped Tuesday on disappointment that Republicans had blocked a move to ramp up stimulus cash handouts, though US lawmakers will likely push ahead with more support measures after Joe Biden takes over at the White House.

US President Donald Trump's push for a larger USD2,000 Covid-19 relief cheque was struck a blow on Tuesday.

Republicans blocked a swift vote proposed by Democrats and split within their own ranks over whether to boost spending or defy the White House.

The roadblock mounted by Senate Majority Leader Mitch McConnell may not be sustainable as pressure mounts.

Brent oil was quoted at USD51.30 a barrel at the equities close on Wednesday, up from USD51.16 on Tuesday.

Gold rose to USD1,885.33 an ounce from USD1,882.29.

Thursday's economic data calendar is quiet, though does contain the latest US initial jobless claims reading at 1330 GMT. Financial markets in Japan are closed on Thursday.

The local corporate calendar is also quiet on Thursday, although SSE, Ashtead and Sage Group are among a host of stocks which go ex-dividend, meaning new buyers no longer qualify for the latest payout.

By Eric Cunha; ericcunha@alliancenews.com

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