Markets report: Brexit deal optimism boosts sterling

Sterling hit its highest level in six weeks against the US dollar yesterday, gaining 1.7pc to $1.3157 over mounting optimism that an EU deal will be done.

The jump was the largest since March 27, when it shot up 2.2pc.

Brexit negotiations are due to start again after coming to a halt last week, reported Bloomberg, with the two sides aiming to reach a trade deal by mid-November.

The FTSE 100 came under pressure from a rising pound and dropped almost 2pc to its lowest level since May 14. The FTSE 250 was less affected, falling just 0.3pc.

Stocks that make the bulk of their revenues abroad weighed on the blue-chip index as the pound climbed. AstraZeneca dropped to its lowest since April 16, losing 1.8pc to £79.20. Unilever lost 2.8pc, while Diageo shed 2.6pc.

Gold did not glitter across London’s markets, with three of the top precious metals miners dropping amid disappointing production reports.

Shares in Egypt-focused miner Centamin led the FTSE 350 fallers, dropping 19pc to 131.3p, after warning production would be lower than expected next year. Peer Fresnillo was also under pressure, dropping 4.4pc to £12.75 after cutting its 2020 gold production guidance.

The FTSE 100-listed, Mexico-focused group now expects gold production in the range of 745,000 to 775,000 ounces, down from previous estimates of 785,000 to 815,000. Silver production guidance remained steady.

Rounding out the string of reports was mid-cap Hochschild, shares in which dipped just over 2pc despite it holding production estimates steady.

The miner said it was “on track” to deliver 2020 production of 280,000 to 290,000 ounces.

Meanwhile, shares in Segro dropped slightly after the FTSE 100 group released a trading update for the period since July, saying it had “continued to perform well” amid rising demand and increased rent collection rates.

The company – which specialises in warehousing spaces and has clients including Amazon and Tesco – said it had signed contracts worth £15.8m over the period, putting its year-to-date total at £49.6m, slightly ahead of 2019’s runrate.

Rent collection improved, with fourth-quarter intake at 85pc of the total – “higher than at the equivalent date in the second and third quarters”.

Goodbody’s Colm Lauder called the update “robust”, adding Segro was “well positioned” to take advantage of market trends.

Among mid-caps, Avast shares lost 3.7pc despite it sticking to its estimates for full-year performance against a backdrop of steadily improving revenue and profit forecasts.

William Hill shares were flat. The FTSE 250 group said its performance was solid over the 13 weeks to the end of September, with UK retail footfall nearing pre-pandemic levels.

Overall, revenues were down 9pc year on year during the period, an improvement on the 32pc drop across the first half. For the year to date, revenues were down by a quarter compared to 2019.