Single Market Commitment Alleviates Brexit concerns

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Traders remained worried about the absence of a UK-EU trade agreement.

Investors have always been cautious that a no-deal Brexit may have significant consequences, as the Office for Budget Accountability predicts that a no-deal scenario in 2021 could cut GDP by 2%.

But this has usually happened on currency markets, and there was no exception on Tuesday.

At times during trading hours, the pound dropped 0.6 percent, despite U.K. assurances. The government has helped reduce damages by not breaking international law relating to the Northern Ireland Protocols.

The pound was 0.12 percent weaker against the dollar and the euro, worth $1,336 and 1,103 euros respectively, when the FTSE 100 closed for the day.

“David Madden, an analyst at CMC Markets UK, said, “As confusion circulates around the UK-EU trade situation, the main indices are mixed.

The UK will remove contentious aspects of the Single Market Act as a gesture of goodwill, so it could help create an atmosphere for a future agreement to be brokered.

He added: “Market sentiment was subdued today as tomorrow’s UK-EU trade talks will most likely take center stage.”

Also a patient’s landmark first vaccine against Covid-19 struggled to raise sentiment, and at 6558.82, the FTSE 100 closed just 3.43 points, or 0.05 percent, higher.

The German DAX increased by 0.2 percent and the French CAC fell 0.23 percent.

SSE and National Grid registered small gains in corporate news, closing up 39.5 pence at 1,403 pence and 12.2 pence at 872.2 pence, respectively.

Both got a boost from the decision of energy regulator Ofgem not to slash the cash that energy networks would allocate as much as initially thought to their shareholders.

Shareholders in Ferguson were not impressed by the plumbing and heating giant’s news that plans to spin off its UK subsidiary Wolseley remain unclear.

Shares closed at 8,506 pence, up 26 pence.

Studio Retail Group – formerly Findel – put itself up for sale on Tuesday for online shopping. The concept was loved by investors, and shares rose 14 percent. The business, which counts the Frasers Group empire of Mike Ashley as its largest shareholder, said the proposal was part of a strategic review. Shares, at 276 pence, cooled but still closed up 13 pence, or 4.9 percent.

Insolvency specialist Begbies Traynor said that during the Covid 19 pandemic, business protections had stayed away from a run on the firm, but it was ready to step up when the rules expire next year. While the company said full-year results would be “at least” in line with expectations, shareholders were disappointed by the news. At 90 pence, shares closed down 3.4 pence.

And in the six months to November 29, shareholders in retailer Joules were disappointed with sales, which fell 15.3 percent year-on-year to £ 94.5 million. At 165 pence, the shares closed down 5 pence.

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