Ignoring North Korea’s latest missile test, and a likely tough OPEC meeting, investors largely focused on the signs of a Brexit breakthrough this Wednesday.
The pound was in party mode following reports that the UK could bow to EU pressure and cough up £50 billion for the divorce bill, a move that would potentially unlock trade negotiations before the end of the year. Against the dollar, sterling is now above $1.34 for the first time in exactly 2 months, while against the euro the currency is at a €1.13, 2 and a half week peak.
These highs proved that the inverse relationship between the pound and the FTSE is alive and well, with the UK index dropping half a percent in the face of sterling’s gains. The FTSE wasn’t helped by the 1.3% and 0.9% declines seen by BP (LON:BP) and Shell (LON:RDSa) respectively, with the oil giants shedding a chunk of yesterday’s muscular growth as investors await the outcome of the latest OPEC get-together.
Despite the euro being up 0.3% against the dollar, its losses against the pound have put the eurozone indices in a very good mood. The DAX surged around 0.6%, and is now only 50 or so points away from the 13200 levels it abandoned earlier in November. The CAC, meanwhile, has risen half a percent, with the IBEX 35 jumping 0.9%, unbothered by a weaker than forecast Spanish GDP reading.
Elsewhere, it was Pepsis all round for Britvic (LON:BVIC), with the drinks company fizzing up 6.5% to hit a fresh all-time record of £8.08 despite higher costs and restructuring charges dragging its full year pre-tax profit 9% lower to £139 million. Investors instead focused on an 8% surge in revenue to £1.54 billion, a 5.1% rise in adjusted EBITA to £195.5 million and comments from chief exec Simon Litherland stating the company is ‘well placed to navigate’ any uncertainty induced by the introduction of the Soft Drinks Industry Levy next April.
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