FTSE 100 set to rise as Boris Johnson hails trade deal with Japan - Britain's first since Brexit vote

Shares on the FTSE 100 were expected to rise today after the UK signed its first big trade deal since the Brexit referendum. Its agreement with Japan was seen as boosting Boris Johnson's claims that Britain is better out of Europe.

While the deal is not as generous as the one Tokyo struck recently with the European Union, it was seen as proof that Britain will be able to make its own arrangements for importers and exporters after the Brexit transition period ends on New Year's Eve.

Pressure remains high on the government to reach a deal with the EU for post Brexit trade terms, however; Japan is currently only Britain's 13th biggest export partner, making up $8.3 billion of exports, compared with Germany's $46.6 billion, France's $31 billion and Holland's $30 billion.

It came as a survey of British manufacturers found a third of UK manufacturers believe a no-deal Brexit would be good for business. The Lloyds poll of large factory producers found 31% thought no deal would be positive for them, of whom most citing increased domestic sales and half said it would help them beat European rivals on price. While Brexiteers were likely to seize on the news, however, 44% still thought Brexit would be bad for them.

The FTSE 100 was set to rise 15 points to 5800, according to CMC Markets trading data, with similar increases expected in the German Dax and French Cac 40 indices.

Traders are awaiting UK retail sales data likely to be fairly strong as shoppers hit the malls and High Streets during September before lockdowns resumed. DIY spending is likely to be a star performer as people splashed out on home improvements and garden furniture as they braced for a return of work-from-home.

Shares in Boohoo could rise after its biggest independent shareholder, Jupiter, said it had rejected calls for new leadership at the group after its Leicester factories scandal.

There had been calls by MPs and pressure groups for founder and largest shareholder, Mahmud Kamani, to step aside following the scandal after an investigation commissioned by the company found evidence that it was run as a private fiefdom, harming its corporate governance and ability to spot the risks of malpractice in its supply chain.

Jupiter said leadership should remain in place although it warned more must be done to improve governance.

US markets closed slightly higher last night, helped by gains in the oil and gas sector which should follow through to Shell and BP in the UK today.

Little light was shed on the likely outcome of the US election by the latest presidential debate, leaving little direction for traders on that score.

As ever, the pandemic continues to heap downward pressure on markets as infection rates rise in many countries around the world, with lockdowns spreading across Europe.

An insight into how that is affecting manufacturers will be given in surveys known as the flash Purchasing Managers Index for France, Germany and the UK. CBI data yesterday for the UK showed the declines were flattening out, although that may worsen again as more parts of the country lock down.

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