(Alliance News) -Â Stocks in London got off to a cautious start to Friday's session, with uncertainty over Brexit and US government stimulus threatening to cast a shadow over the weekend.
However, Brexit jitters were helping the blue-chip FTSE 100 outperform in early trade, with the pound's slide lifting the internationally-exposed index.
Equity indices were mixed in London. The FTSE 100 index was up 17.34 points, or 0.3%, at 6,568.40 early Friday. The mid-cap FTSE 250 index was down 22.10 points, or 0.1%, at 20,273.94. The AIM All-Share index was flat at 1,095.22.
The Cboe UK 100 index was up 0.2% at 653.80. The Cboe 250 was down 0.3% at 17541.17, and the Cboe Small Companies down 0.1% at 11466.60.
In mainland Europe, the CAC 40 in Paris was down 0.3% while the DAX 30 in Frankfurt was 0.2% lower early Friday.
"I'm not sure if I was overly optimistic, a little naive or just caught up in the festive season earlier this week but it seems negotiators on both sides of the Atlantic have decided they can squeeze out a few more days of talks before shaking hands - metaphorically, maybe under the circumstances - on a deal," said Craig Erlam at Oanda.
He continued: "What that means is we could be carrying a hefty amount of event risk into the weekend which may explain some of the moves we're seeing on the final trading day of the week."
Post-Brexit trade deal talks between the UK and EU will continue in Brussels after the two sides warned that major obstacles remain despite progress in the negotiations.
UK Prime Minister Boris Johnson told European Commission President Ursula von der Leyen in a call on Thursday evening that the EU must "significantly" shift its stance on fishing if there is to be an agreement.
Von der Leyen acknowledged that "big differences" remained between the two sides and stressed that "bridging them will be very challenging".
Time is running out to reach a deal with just a fortnight until the end of the transition period, and Johnson said the negotiations were now in a "serious situation".
Richard Hunter at Interactive Investor said "sluggish" Brexit progress is "tightening the screw on sterling" as the clock runs down.
The pound was quoted at USD1.3540 early Friday, falling back significantly from USD1.3600 at the London equities close on Thursday. The euro traded at USD1.2261 early Friday, higher than USD1.2242 late Thursday.
Focus also lies on Capitol Hill, where US lawmakers continue to wrangle over further stimulus for the pandemic-stricken economy. 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.
In London early Friday, Smith & Nephew shares rose 2.2% after Berenberg raised the medical technology company to Outperform from Market Perform.
Halma rose 1.7% on the sale of Fiberguide Industries to Molex for a cash consideration of USD38 million.
Fiberguide, which was acquired by the London-listed hazard detection and life protection technologies manufacturer in 2008, is a manufacturer of fibre optic technology headquartered in the US state of Idaho. Molex is "closely aligned" to Fiberguide's core business, said Halma.
"We are confident that this will help Fiberguide better serve its customers, employees and suppliers while enabling Halma to continue to invest in high growth businesses that are closely aligned with our purpose," said Halma Chief Executive Andrew Williams.
British Land dipped 1.7%. The property developer said it has completed the drawdown of the 500-year headlease with Southwark Council, a "significant milestone".
The headlease will combine the ownership of British Land's assets at Canada Water in south east London into a single 500-year headlease, with Southwark Council as the lessor.
"British Land's new 500-year headlease will allow comprehensive redevelopment and investment in the site with Southwark Council owning an initial 20% interest and with the ability to participate in the development, up to a maximum of 20% with returns and ownership pro-rated accordingly," the FTSE 100 constituent said.
British Land added that it has signed signed its first pre-let at Canada Water with new higher education enterprise, TEDI-London. TEDI-London will take an initial 13,000 square feet of floorspace, with the option to expand up to 40,000 square feet.
Restaurant Group slipped 3.0% as it said the UK's tiering restrictions makes the outlook for the first quarter of 2021 "extremely challenging", though it is encouraged by vaccine progress.
The casual dining chain owner said cashburn during the November national lockdown was minimised to GBP5.5 million for the month. Restaurant Group said it expects further"significant disruption" to trading whilst tiering restrictions remain in place.
"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 tiering restrictions makes the outlook for the first quarter of 2021 "extremely challenging", but the board is encouraged by vaccine progress.
"The board believes the group is well positioned to benefit from a sustained removal of restrictions given its previous strong trading performance following the first lockdown. We therefore expect a strong recovery when there is a return to more normal levels of customer activity," the company said.
In Asia on Friday, the Nikkei 225 index in Tokyo closed down 0.2%. Against the yen, the dollar strengthened to JPY103.58 versus JPY103.10 following the Bank of Japan's latest policy decision.
The Bank of Japan extended an emergency virus-related lending programme but kept its monetary easing policy unchanged Friday, as the country faces a record spike in new Covid-19 cases.
In May, the central bank launched a new lending scheme aiming to channel funds to small and medium-sized businesses suffering from the economic fallout of the coronavirus pandemic. At a two-day policy meeting, the Bank of Japan extended the end-date for those measures by six months to September 2021.
In China, the Shanghai Composite ended down 0.3%, while the Hang Seng index in Hong Kong closed down 0.7%. In Australia, the S&P ASX 200 closed down 1.2%.
Gold was quoted at USD1,878.35 an ounce early Friday, down from USD1,888.75 on Thursday. Brent oil was trading at USD51.34 a barrel, soft on USD51.45 late Thursday.
By Lucy Heming;Â lucyheming@alliancenews.com
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Halma (HLMA)
Smith & Nephew (SN.)
British Land (BLND)