Investors welcome the Brexit deadline extension

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As soon as the “final” deadline for talks on a trade agreement between the UK and the EU was extended, traders breathed a sigh of relief when they were hit by London’s Stage 3 ranking.

On the extended deadline to conclude a trade agreement by the end of the year, the pound spent much of Monday rising – at times rising more than 1 percent .

But growth marginally fell back as markets closed, after the government put London in the highest tier grouping.

The pound had risen 0.7 percent against the dollar to 1.332 by late afternoon and 0.51 percent against the euro to 1.097 compared to the same period on Friday.

The FTSE 100 index closed down 14.92 points, or 0.2 percent, at 6,531.83, as a result of the strong pound.

CMC Markets UK financial analyst David Madden said the FTSE 100 was the European markets’ underperformer.

He added: “To some extent, today’s move is a reversal of Friday’s declines, with housebuilders and banks among the biggest gainers in the market. A number of large commodity companies – mining and oil – are also holding back the U.K. equity benchmark.”

At 157.85 pence, NatWest Group closed 7.5 pence, Lloyds closed 1.66 pence at 35.73 pence and Barclays closed 6.3 pence at 142.36 pence.

Taylor Wimpey, up 6.2 pence at 156.75 pence, and Barratt Developments, up 22.2 pence at 605.6 pence, were homebuilders that got a boost.

France’s CAC 40 ended 0.4% higher in Europe and Germany’s DAX 30 added 0.8% .

The U.S. gaming giant Electronic Arts (EA) has signed a £ 945 million takeover deal with British racing games specialist Codemasters. Shares closed 122 pence at 656 pence, showing that investors hope for a bidding war – the offer from EA stands at 604 pence per share.

The Hollywood Bowl had its profits almost wiped out by the pandemic of Covid 19. The business revealed that pre-tax income had fallen from £ 27.6 million to just £ 1.2 million for the year to Sept. 30.

Yet investors have already priced in the losses and at 190p the shares closed down just 0.5p.

Finally, outsourcing giant Capita sold its education network division ESS to private equity house Montagu for up to £400 million. At 44.91 pence, shares closed down 0.45 pence.

Insurance group shareholders Aviva seemed satisfied with the recent sale of a non-core asset – shares closed 4.3p at 320.3p – when the firm revealed it had divested its life insurance business in Vietnam.

The company announced the divestment of its Vietnamese life insurance division following the sale in recent months of divisions in Italy, Hong Kong and Singapore.

And investors in the Ultimate Goods consumer products company were delighted with an unscheduled update as bosses said that after sales increased and margins improved, profits for the current year could exceed market expectations. At 114.25 pence, shares closed up 16.25 pence.

Next, 360 pence at 6,746 pence; Melrose, up 8.15 pence at 163 pence; JD Sports, up 38.8 pence at 790.6 pence; NatWest, up 7.5 pence at 157.85 pence; and Persimmon, up 121 pence at 2,584 pence, were the highest risers in the FTSE 100.

AstraZeneca, down 468 pence to 7,692 pence; Polymetal, down 89 pence to 1,615 pence; Royal Dutch Shell ‘A’ shares, down 34.6 pence to 1,360.2 pence; BHP, down 48.6 pence to 1,940.4 pence; and Royal Dutch Shell ‘B’ shares, down 28 pence to 1,309.4 pence, were the largest decliners.

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