By Shashank Nayar and Ambar Warrick
(Reuters) - London's blue-chip index ended higher on Wednesday as weakness in the pound looked to benefit major exporters, while the mid-cap index was held back by consumer stocks on fears of new restrictions on social activity.
The FTSE 100 (FTSE) ended 1.4% higher as uncertainty over Brexit talks weighed on the pound. Stocks such as British American Tobacco (L:BATS) and Unilever (L:ULVR), which make a bulk of their revenue overseas, were the biggest boosts to the index.
The midcap index (FTMC) ended 0.2% lower, with consumer discretionary stocks weighing the most as Prime Minister Boris Johnson announced new restrictions on social gatherings in England to tackle a surge in COVID-19 cases.
Pub and restaurant owners including J D Wetherspoon Plc (L:JDW), Marston's Plc (L:MARS) and Restaurant Group Plc (L:RTN) fell between 8% and 11%, while the domestic travel and leisure index (FTNMX5750) lost 1.4%.
"The new social restrictions have led to some panic selling, especially in some restaurant and pub stocks, with the possibility of further downfall if more draconian restrictions are imposed," said Keith Temperton, a sales trader at Forte Securities.
AstraZeneca Plc (L:AZN) recovered from initial losses, ending marginally higher on a report that it could resume trials for its experimental coronavirus vaccine next week. The firm had paused trials of the vaccine after an unexplained illness in a participant. [nL4N2G636B]
Its peer Glaxosmithkline (L:GSK), which is also developing a vaccine, rose 2.7%.
Hopes for vaccines and treatments to address the pandemic have helped lift global equity benchmarks after a crash earlier this year.
But British stocks have lagged their peers in the developed world as resurgent infections and middling economic data cut short an initial bounce from March lows.
In company news, shares in Britain's biggest domestic bank Lloyds (L:LLOY) were flat as it said it was making 865 redundancies, with lenders resuming cost-cutting measures to ride out the impact of the pandemic.