Rumors that a trade agreement could be signed between the UK and the EU as early as Wednesday night were sufficient to send markets and the pound soaring, reversing the losses seen earlier in the week.
As the FTSE 100 index closed up 42.59 points, or 0.7 percent, at 6,495.75, investors opted not to let the new Covid 19 constraints dampen their spirits.
At 20,297.76, the domestically focused FTSE 250 ended up 347.04 points, or 1.7 percent.
The pound rose 1 percent to 1.349 against the dollar and 0.7 percent to 1.106 against the euro as markets closed compared to Tuesday at the same time.
The CAC 40 closed up 1.1 percent in Paris, while the DAX 30 closed 1.3 percent higher in Frankfurt.
Increased talk that the UK and the EU will enter a trade agreement has raised sentiment, David Madden, market analyst at CMC Markets UK, said. Equity markets were still up ahead of the excitement over the trade negotiations, so a notch was then kicked up the upside.
The Covid 19 crisis is still in the news, but traders are focused on the UK-EU situation right now,”The Covid 19 crisis is still in the news, but right now traders are fixated on the situation between the UK and the EU,”
“In the London market, banks, housebuilders, airlines and transport stocks are showing decent gains.”
Pub operator Marston’s said it would take over SA Brain’s service of around 150 pubs in Wales, securing up to 1,300 jobs. The chairman of Brain had said the decision was taken because the company had been tollled by restrictions in Wales.
Marston’s shares closed at 74.8 pence, up 5.9 pence.
Premier Inn, Beefeater and Brewers Fayre’s owner, Whitbread, announced that it has written to landlords that due to “significant” net cash outflows in the first half, it plans to pay just 50 percent of the rent for the last three months of the year. Shares closed 121 pence at 3,138 pence.
Cairn Energy oil and gas company shareholders welcomed the news that the company had won nearly £ 1 billion in arbitration in a court in the Netherlands against the Indian government. Shares rose 26.7p, or 22.1 percent, to 202.6p.
The board of easyJet was narrowly re-elected for another year, months after a big dispute with the founder of the group, Sir Stelios Haji-Ioannou, who is dissatisfied with plans to purchase 107 aircraft from Airbus. Just over 57 percent of the vote was earned by Chairman John Barton and Chief Executive Johan Lundgren. Shares closed 57 pence at 832 pence.
And British Land reported that it had reached an agreement to sell shares to Allianz Real Estate for £ 401 million in three properties in London’s West End. Shares closed at 497.7 pence at 14.1 pence. The transaction is expected to close in January.
Lloyds Banking Group, up 2.43 pence at 37.125 pence; IAG, up 9.55 pence at 161.8 pence; Natwest Group, up 8 pence at 166.9 pence; Berkeley Group, up 207 pence at 4,628 pence; and JD Sports, up 36.6 pence at 850.2 pence, were the largest winners in the FTSE 100.
Just Eat Takeaway, down 194 pence at 8,000 pence, Reckitt Benckiser, down 104 pence at 6,452 pence, CRH, down 46 pence at 3,111 pence, AstraZeneca, down 104 pence at 7,224 pence, and Experian, down 35 pence at 2,779 pence, were the biggest droppers.